Only a small percentage of damage to insured assets caused by May floods in Italy will be covered as the majority of risks in the Italian insurance market do not cover flood, Verisk has revealed in a recent report.
The major floods events in Italy were caused by a pair of excessive rainfall events May 1-3 and 16-17. They impacted areas of northeast Italy, in particular the Emilia-Romagna region.
A month later, the affected areas are still cleaning up and working toward recovery. Of the approximately 70 river gauges observed across the region, nearly 20 showed water levels at a 100-year return period or higher per the Verisk Flood Model for Italy.
The historic peak river flows were spread across a broad swath of Emilia-Romagna, impacting the provinces of Bologna, Forlì-Cesena, Modena, Parma, Piacenza, Ravenna, Reggio Emilia, and Rimini within that region.
In addition, more than 400 landslides were caused by the flooding, including approximately 100 in Forli Cesena, 90 in Ravenna, 40 in Bologna, 25 in Modena, 15 in Reggio Emilia, and more than ten in Rimini.
The Emilia-Romagna region of Italy is one of the most flood prone regions of the country, analysts noted.
Yet, the majority of risks in the Italian insurance market do not cover flood, Versisk’s report revealed.
“For commercial and industrial lines of business, Verisk data indicates that approximately 45% of risks are covered for flooding. The market for residential flood insurance in Italy is sparse, and as in many regions, there is a major gap in protection for these risks as they are not typically covered by standard policies,” said analysts.
Adding: “As a result of the low take up, the proportion of the extensive residential damage caused by this event covered by the insurance market will likely be a small percentage of the overall insurable loss.”