As surging flood waters inundated the Midwest–causing damagethat for the most part is not covered by private insurers–theInsurance Information Institute announced a study showing that only17 percent of Americans have a federal flood insurance policy.

Indeed, Property Claim Services–which catalogs insured lossesfrom catastrophes–expects covered damage from the flooding “will besmall in number, since most of the affected properties are notinsured for this peril,” noted Gary Kerney, assistant vicepresident of PCS.

Despite that fact, the Property Casualty Insurers Association ofAmerica announced last week that insurers have implemented a 60-daymoratorium on cancellation and nonrenewal of p-c insurance policiesfor people living in flood-affected Midwest counties.

PCI said the moratorium was instituted in cooperation with theIllinois, Indiana and Iowa insurance departments. “We understandthat residents are trying to get their lives back in order, andthis is one of the many things the insurance industry is doing tohelp,” said Greg LaCost, PCI assistant vice president and regionalmanager.

A report from reinsurance broker Guy Carpenter's Instrat unit,citing data from the Federal Emergency Management Agency, said morethan 11 million people in nine Midwestern states have been affectedby the recent flooding and extreme weather. At least 16 people havebeen killed, and the flooding has forced at least 38,000 people toevacuate their homes. Crop damage has also been considerable, withIowa alone reporting $1 billion in damage.

In Indiana as many as 800 buildings were said to have beendestroyed in Johnson County, around 1,700 homes damaged in MorganCounty, 600 homes were damaged in Owen County, and 1,100 homes weredamaged in Vermillion County.

The preliminary estimate of damage to the public infrastructurein four impacted Minnesota counties was put at $8.3 million.

Meanwhile, the Insurance Information Institute said theproportion of Americans with a policy from the National FloodInsurance Program is relatively unchanged from a year ago, when 14percent said they had federal flood coverage.

However, there has been some improvement in the take-up rate forflood coverage. According to the Institute, in the North Centralstates–where much of the most recent catastrophic flooding isoccurring–17 percent said they have flood insurance, up from 9percent in 2007.

“The results show that although more people are buying floodinsurance, the percentage is still dangerously low,” said JeanneSalvatore, senior vice president and consumer spokesperson for theInstitute, in a statement.

The Institute's survey also found that:

o In the Northeast, the percentage of homeowners with floodinsurance doubled–from 10 percent in 2007 to 20 percent in2008.

o In the Western region, 15 percent said they have floodinsurance in 2008, up from 13 percent last year.

o Slightly fewer homeowners in the South now say they have floodinsurance–17 percent, compared with 20 percent in 2007.

These findings are consistent with NFIP data showing an increasein the number of people nonrenewing flood policies in Gulf Coaststates, despite the flood damage caused by Hurricane Katrina in2005, according to the Institute.

Annual premium for a homeowners NFIP policy starts at $112 peryear, according to the Federal Emergency ManagementAgency–increasing according to the level of flood risk and amountof coverage needed. (The maximum coverage amount is $250,000 forthe structure of a home, and $100,000 for its contents.)

The Institute said Opinion Research Corp. interviewed 1,004people for the survey from May 15-18, 2008.

PCS, a unit of the Jersey City, N.J.-based Insurance ServicesOffice Inc., said by e-mail that for the most part, flood damage tostructures is not covered except through the NFIP. But ISO is awareof some commercial structures that are protected to some degree byflood coverage provided by private insurance companies.

Examples of these types of properties include universities andhospitals–but that is not to say all such occupancies haveinsurance coverage, PCS explained. Vehicles insured withcomprehensive coverage will be protected for flood damage,according to PCS.

As this story went to press, PCS had not assigned a catastropheserial number related to the general flooding that is beingreported in areas of Iowa, Missouri and Illinois.