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luck.
>> Thank you so much for

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having me.
>> Property loss due to

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flooding, like what happened
in Milwaukee is likely not

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covered by the standard
homeowner's insurance

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policy. It would be covered
up to a point under flood

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insurance. But according to
the state Insurance

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Commissioners Office,
Wisconsin has one of the

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lowest number of flood
insurance policies in the

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nation, at under 11,000 of
more than 2.7 million

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households. Our next guest
researches flood insurance

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costs and benefits as
assistant professor in the

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Risk and Insurance
Department at the Wisconsin

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School of Business. Philip
Mulder joins us now. And

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thanks for being here.
>> Thank you, Frederic.

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Happy to be here.
>> So what's the explanation

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for why so few people hold
flood insurance? Do they not

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know that they need it?
>> I think that it's a

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variety of cases. You know,
on the one hand, especially

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in a state like Wisconsin,
where we're not used to

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thinking of floods as a
regular risk, a lot of

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people don't do the due
diligence that you would

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need to discover that your
homeowner's insurance policy

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doesn't cover that peril,
right? You may be told that

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as you buy the policy, but
maybe you forget over time,

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or you don't notice as
you're kind of finalizing

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the details. In other cases,
maybe people do know that

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flood isn't covered, but it
is an extra cost. It can be

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on the low end, you know,
three $400 a year on the

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high end. If you are in a
high risk area, maybe even

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thousands of dollars a year
for a lot of households

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that's outside of their
immediate budget, especially

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if flooding isn't top of
mind as a as a potential

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risk.
>> Certainly top of mind

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right now, right after what
happened in Milwaukee. But I

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put a Milwaukee address that
did experience flood damage

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into the flood risk
calculator, and it came out

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as low risk. Our flood maps
accurate. And have they

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changed recently? Do they
change a lot?

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>> The information that we
have about flood risk can

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often be, I think confusing
to the typical household.

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It's sort of important to
break down what might be out

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there. On the one hand you
have sort of what we've

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always called flood maps,
which are made by FEMA, and

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those can often be out of
date. These are updated over

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time by the US Army Corps of
Engineers through studies.

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But that process can is
supposed to be done every

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five years, but often flood
maps can be more than a

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decade out of date, even
when they are updated, they

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don't always do a rigorous
study. So. So yes, that

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information is often out of
date, even if you're not in

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an official floodplain, your
home may have substantial

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risk. The National Flood
Insurance Program is using

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newer information now to
price policies based on risk

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rating 2.0, but that can be
very difficult for

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homeowners to learn about.
So sometimes you'll see

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information on the flood map
that tells you your low risk.

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And another set of
information may be telling

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you that your high risk.
>> And so what should the

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homeowner do?
>> Well, you know, it's

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important to sort of take a
holistic view of everything

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that you can do to learn
about your risk. There's

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also third party tools out
there, like First Street

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Foundation. I understand
that the end of the day,

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this probably seems like
throwing even more

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information at the home
owner. I think looking into

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what the Nfip is charging
you, this is the National

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Flood Insurance Program. You
know, that premium is based

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off of their best estimate
of your risk. If you're

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being charged a high
premium, it's probably

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because you have high risk.
And it seems to me that some

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people might explain away
risk in Wisconsin by saying

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what happened in Milwaukee
was a thousand year flood.

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It's not going to happen
again.

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>> Well, you know, I mean, a
1 in 1000 chance of having

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your home ruined is a
substantial risk, right?

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That's what flood insurance
and insurance in general is

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for, is to take something
that yes, it's unlikely, but

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if it were to happen, could
be catastrophic. And to and

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to, you know, get insure
against that. The other

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thing too is, you know, when
we talk about things like

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1000 year or a 100 year
concept to wrap our heads

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around. It does not mean
that this will only happen

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once every thousand years.
There's 1000 year floods

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every year somewhere in the
country, right? And in

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addition, what is a thousand
year flood? That's something

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that we can only estimate
and that we think is

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changing with changing
weather patterns.

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>> So if you buy a flood
insurance policy, maybe

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you're not even in a high
risk area, but maybe you

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just want to be covered.
Does that then cover for

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replacement, or are they all
different?

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>> You are probably going to
be able to find some

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different types of coverage
on the market. So, you know,

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I've thrown out the term
nfip, the National Flood

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Insurance Program that is a
federally run insurer, and

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they are the primary
provider of flood insurance

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in the United States and
including Wisconsin. They

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will sell you up to $250,000
of coverage. A lot of homes

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that will not cover the full
replacement cost, but for

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some of the smaller floods,
maybe primarily affect the

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lower levels of a home,
which which are more typical

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in Wisconsin, you might be
able to get enough coverage.

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Now, there's also private
providers of flood

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insurance, and there you
might be able to find more

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coverage options and things
that can cover more

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expensive homes. It's always
important to talk things

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through with an agent or a
broker. Understand

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differences between actual
cash value, replacement cost

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value policies. You know,
these these can definitely

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be tricky concepts.
>> So given torrential rain

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events that are on the
increase, should we all just

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assume that we need flood
>> You know, it's I think

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it's a decision that every
household has to make for

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itself. What I hope is that
people can go in with full

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information. I think that
often people assume that

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they have low risk because
they're not in a floodplain.

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That's not always going to
be true. People will say

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things like, oh, I can't get
flood insurance. I'm not in

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a floodplain. That's not
true. The National Flood

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Insurance Program will sell
flood insurance in almost

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every community. As a
participating nfip

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community, that means you
can buy flood insurance

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inside or outside of the
floodplain, so people should

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understand their options.
Now there's other steps you

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can take some pumps in your
basement, elevating homes

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that are near waterways,
keeping a buffer of savings.

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If you only face small, say,
basement damages, you know,

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these are other tools that
homeowners can use to handle

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flood risk. But flood
insurance is definitely one

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of those tools, and
households should take a

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look at their budgets and
see if that makes sense.

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>> If you put a sump pump or
other measures like that in

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your basement, does that
reduce the cost? If you buy

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flood insurance?
>> Not in every case. And in

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addition, you know, some
things are excluded through

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flood insurance policy. So
basements in many cases you

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might be on your own
altogether, certainly for,

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say, covering the contents
down there, you know, flood

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insurance is really for
dealing with the worst case

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scenarios. I know that, you
know, a 10 or $20,000 loss

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can be financially
catastrophic to families,

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but ultimately, what flood
insurance is for is even

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bigger losses, potentially
the kind of flooding that

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could ruin your entire home.
>> Wow. Well, Philip Mulder,