Tackling the Rising Threat of Snow Melt Flooding

The phenomenon of snow melt flooding is emerging as a significant threat in the United States, challenging the readiness and resilience of businesses across various states. Richard Coyle, U.S. Commercial Director at FloodFlash, emphasizes the urgency for insurance professionals to proactively address their clients’ risks associated with these floods. Unlike seasonal rainfall, snow melt can result in flooding any time of the year, with the potential to impact regions far removed from the initial snowfall. This has raised concerns about the adequacy of property and business interruption coverages, especially for businesses relying solely on the National Flood Insurance Program (NFIP), which may not provide comprehensive protection.

The insurance industry faces a substantial challenge as snow melt flooding becomes more prevalent, exacerbated by climate change’s impact on weather patterns. Despite the common misconception that standard property insurance policies cover flood damage, the reality is that flood is the most uninsured peril in the U.S. The gap between the coverage provided by NFIP and the actual needs of businesses is significant, with many companies facing the risk of being underinsured due to policy limitations and the withdrawal of private carriers from the flood insurance market.

To navigate this growing risk, businesses are advised to consult with insurance brokers who can assess their flood risk exposure and recommend appropriate levels of protection. Innovative insurance solutions, such as parametric insurance policies and offerings from the excess and surplus lines market, are available to fill the coverage gap. Moreover, implementing practical flood resilience measures and developing a comprehensive flood plan are crucial steps in mitigating the impact of snow melt floods.

While lobbying for governmental action on flood risk management is a long-term strategy, businesses can take immediate steps to secure alternative flood protection through the private insurance market. As snow melt flooding threatens to become more severe, the insurance industry plays a pivotal role in safeguarding businesses against this unpredictable natural disaster.