CUNA Mutual Group Advises Credit Unions on the Importance of Insurance in Natural Disaster Recovery
April 30, 2019
According to the Federal Emergency Management Agency, flooding is the most frequent and costliest natural disaster in the United States. Despite this, and the fact that as little as one inch of water in an average-sized residence can cause more than $25,000 in damage, people outside special flood hazard areas are not protecting themselves by purchasing flood insurance.
This “coverage gap” as FEMA calls it, can have devastating effects for credit unions and their members, as post-natural disaster flooding can leave them both literally and figuratively underwater.
To address this issue, FEMA announced its ambitious “Moonshot” project to double the number of properties covered by insurance in 2023. Strategic Link partner, CUNA Mutual Group, works to help credit unions ensure its members are properly insured so they can quickly recover from a flood or other catastrophic event. Because it believes the credit union industry is uniquely situated in the marketplace to help bridge the insurance gap, CUNA Mutual Group is working with FEMA to help close the insurance coverage gap.
When Hurricane Harvey hit in 2017, a total of $17 billion in damages was covered by insurance, and $40 billion in losses were uninsured. Credit unions risk facing significant mortgage charge-offs following a catastrophic natural disaster. The impact of flooding was also felt by businesses. According to FEMA, almost 40 percent of small businesses don’t reopen their doors following a disaster because of the high costs associated with flood damage. Businesses lost to floods can permanently stunt the growth of a community and create significant risks for credit unions making small business loans.
As member-owned financial cooperatives, credit unions can play a unique and critical role in educating their members on the risks of flooding and help separate facts from fiction. In doing so, credit unions help their members achieve financial stability while protecting their own stability in the event of a catastrophic natural disaster. CUNA Mutual Group has made FEMA’s “Moonshot” resources available for credit unions to share with their members here.
To learn more about CUNA Mutual Group, please contact Northwest Credit Union Association Strategic Partnerships Manager, Kaitlin Ramos. To learn about Strategic Link’s partnership with CUNA Mutual Group, visit its webpage.