Are Millennials More Likely to Buy Flood Insurance?
Are Millennials More Likely to Buy Flood Insurance?
Are younger homeowners more likely to protect their property by buying flood coverage? It seems so, according to a recent study.
Millennials — those born between 1981 and 1996– are nearly three times more likely to have purchased flood insurance than their older Baby Boomer counterparts born between 1944 and 1964, according to a national survey from the National Association of Insurance Commissioners (NAIC).
Overall, less than half of Americans who agree that having flood insurance is important have actually purchased flood insurance.
The survey of 1,000 American adults conducted in May reveals that Millennials are not only nearly three times more likely to have purchased flood insurance than Baby Boomers, but they are also more likely than Gen Xers born between 1965 and 1980 to purchase flood insurance (25% vs. 16%).
Overall, Millennials are more likely to agree/strongly agree that purchasing a flood policy is a good idea (57% vs. 41% for Gen X vs. 24% for Baby Boomers).
Recent floods in the Midwest and South where recovery efforts will continue for years bring home the disconnect between intention and action on flood coverage. According to the survey, 41% of respondents agree or strongly agree that flood insurance is a “good idea” but only 17% say they have purchased flood insurance, and even that response may be based on a misunderstanding.
One Insurance Journal reader suggests that the disparity in buying habits could be explained through insurance purchasing burn-out: “We’ve experienced several situations where a younger insurance buyer, and especially first time home owner, will want to check all the boxes when it comes to coverage,” the reader commented. “On the other hand, our older clients (many retirees) give us that song and dance on ‘I’ve lived here for years and never seen a flood, so I’m not buying it anymore’ or ‘I’ve paid for insurance for 40 years, never had a claim so I want to remove coverage.'”
Another reader suggested the trend could simply be that younger people buy more property in flood zones and therefore must purchase flood insurance as a lender requirement.
Still, there are few homeowners that actually buy coverage, young or old. The Federal Emergency Management Agency (FEMA) estimates that only about 3% of homeowners have flood insurance.
“This disparity perhaps reflects the common, though incorrect, assumption that homeowners insurance covers flooding,” said Eric Cioppa, NAIC president and Superintendent of the Maine Bureau of Insurance.
The NAIC survey was conducted online among 1,004 adults comprising 502 men and 502 women 18 years of age and older. This survey was live May 20-22, 2019.