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Flood Insurance Questions
Old 09-08-2017, 04:05 PM   #1
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Flood Insurance Questions

There was a couple other threads related to this here at ERF, but neither one addressed the questions I have.

The following is from an article I read yesterday:

With 1,350 miles of coastline, the most in the continental United States, Florida has roughly 2.5 million homes in hazard zones, more than three times that of any other state, FEMA estimates. And yet, across Florida's 38 coastal counties, just 42 percent of these homes are covered.

Florida's overall flood insurance rate for hazard-zone homes is just 41 percent. Fannie Mae ostensibly requires mortgage lenders to make sure property owners buy this insurance to qualify for federally backed loans, and yet in 59 percent of the cases, that insurance isn't being paid for.

Average annual premiums range from about $4,200 in Horseshoe Beach, a town of 169 residents on the Gulf Coast where 78 percent of policies have been dropped since 2012, down to about $200 in several cities. In most, it's between $300 and $500.

I had to look up what ostensibly means
adverb
apparently or purportedly, but perhaps not actually.

In the counties being under at least partial evacuation orders Wednesday (Collier, Broward, Monroe and Miami-Dade), where 1.3 million houses are estimated to be in flood hazard zones, the percentage is an even lower 34.3 percent.

Question 1: If the 4 counties mentioned above, are all severely impacted by the hurricane, will the homes that didn't purchase FEMA insurance be covered anyway ?

Question 2: I live in South Central Minnesota. (Non-Flood Risk Area)
My house is a special energy efficient design. All 3 bedrooms are in the basement, & except for the laundry, bathroom, & furnace area, it's all carpeted.

Since I bought it about 24 years ago, there's been 9 or 10 instances of torrential rain's. Up to 11 or 12 inches in a 24 hour period.

Luckily for me, the power was never was out during any of these, & my Zoeller sump-pump never failed. (put in a brand new one a couple months ago AAMOF) Unfortunately, I can't say the same for many of my neighbors.

I talked to my agent yesterday to see how much flood insurance would cost.
(I have a 5k deductable)

Flood coverage would cost – 425.00/year. The deductible is 1250, FEMA doesn’t allow a 5K deductible for this policy. 150K in building coverage, 60K in contents coverage.

Next level is 200K in building coverage and 80K in contents coverage for 467.00/year.

I guess this question is pretty much the same as the 1st, except I'm personalizing it for myself. If I didn't purchase the flood insurance, & next summer we had 20 inches of rain in one day, and for whatever reason my basement flooded, would I be covered in any way ?

Thanks
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Old 09-08-2017, 04:12 PM   #2
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Originally Posted by ownyourfuture View Post

Question 1: If the 4 counties mentioned above, are all severely impacted by the hurricane, will the homes that didn't purchase FEMA insurance be covered anyway ?
No, not covered for flood. And only covered for hurricane if they have a wind policy.
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If I didn't purchase the flood insurance, & next summer we had 20 inches of rain in one day, and for whatever reason my basement flooded, would I be covered in any way ?

Thanks
No. Flood coverage requires a separate policy, no matter where you live. It is priced based on the flood zone risk.

Many flood zones are in the midwest, and much of the coastal area in Florida is not a flood zone.
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Old 09-08-2017, 04:29 PM   #3
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No, not covered for flood. And only covered for hurricane if they have a wind policy.
Thanks for the reply Michael.

Knowing that, I have to ask the obvious question.
If someone in the hazard zone in Florida hasn't purchased wind or flood insurance, what happens if their home is obliterated by the wind and/or flooded ?
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Old 09-08-2017, 04:31 PM   #4
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I have flood insurance, I bet Im the only one in the whole neighborhood that has it. But for the 350 something bucks I sleep better. Its a 1000 deductible, I was going to drop it as they added a surcharge this year , but I renewed it. That being said, somehow I remember when hurricane Sandy hit people in my old neighborhood got slammed, people were all crying about not having flood insurance and they got 1000's in free money anyway. Some also took low interest loans, but I know free money was handed out to the uninsured the number was about 5K. Nice, Im an idiot that pays for an unneeded( I think), and the ones that needed it got free dough, go figure. UPDATE, I just googled the case I was thinking about, they got 20 Thousand in free money, not from the flood insurance people that they didnt have, from FEMA. If my house got flooded they would blame me for the flood, and I would collect zero, people with no insurance cry and get 20k.
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Old 09-08-2017, 04:58 PM   #5
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I have a relative in Rockport Tx. He has flood insurance, and wind storm damage insurance. He got really lucky, $17,000 in damage, $15,000 deductible. No flood damage. I'll let you know if anyone knocks on his door with $20,000.
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Old 09-08-2017, 05:14 PM   #6
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If someone in the hazard zone in Florida hasn't purchased wind or flood insurance, what happens if their home is obliterated by the wind and/or flooded ?
Catastrophic financial loss.
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Old 09-08-2017, 05:16 PM   #7
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Katrina, lost a rental house to flood. Had flood insurance and made whole pretty quickly.
We were probably only folks with flood insurance in Colorado ( last place we lived) we were near a big lake. I seem to remember that basements were not covered, just areas at ground level.
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Old 09-08-2017, 05:36 PM   #8
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I have flood insurance, I bet Im the only one in the whole neighborhood that has it. But for the 350 something bucks I sleep better. Its a 1000 deductible, I was going to drop it as they added a surcharge this year , but I renewed it. That being said, somehow I remember when hurricane Sandy hit people in my old neighborhood got slammed, people were all crying about not having flood insurance and they got 1000's in free money anyway. Some also took low interest loans, but I know free money was handed out to the uninsured the number was about 5K. Nice, Im an idiot that pays for an unneeded( I think), and the ones that needed it got free dough, go figure. UPDATE, I just googled the case I was thinking about, they got 20 Thousand in free money, not from the flood insurance people that they didnt have, from FEMA. If my house got flooded they would blame me for the flood, and I would collect zero, people with no insurance cry and get 20k.

$5K is not going to replace a house.... it was probably to help them move to some other place...

Some people get low interest rate loans to rebuild... not sure what happens if they do not pay it back...

I know that after Katrina there were many people here in Houston... about 40,000 IIRC... some where having their apt paid for 2 or more years after the disaster... some were in hotel or motel rooms for at least 1 year (paid for)....

I do not think you get free federal money to rebuild if you did not have insurance...
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Old 09-08-2017, 05:36 PM   #9
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I have a relative in Rockport Tx. He has flood insurance, and wind storm damage insurance. He got really lucky, $17,000 in damage, $15,000 deductible. No flood damage. I'll let you know if anyone knocks on his door with $20,000.

If that is the case... should it not be $2,000 instead of $20,000?
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Old 09-08-2017, 06:02 PM   #10
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OP - if you are worried about floods in your basement, install a battery back up sump pump, so if power goes out, you can be safe for the next bunch of hours.
Gives you time to get a generator set up and plugged in, or at least covers you during short power outages when you are away.
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Old 09-08-2017, 08:48 PM   #11
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Did anyone else catch the interview with one of the Harvey victims who said "I don't know if I have flood insurance?" Wow. I feel for these folks but wow.
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Old 09-08-2017, 10:02 PM   #12
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Did anyone else catch the interview with one of the Harvey victims who said "I don't know if I have flood insurance?" Wow. I feel for these folks but wow.
When someone says that then it means "No, I do not have flood insurance and I do not want to admit it"...

There is no way you have it and not know....
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Old 09-08-2017, 10:58 PM   #13
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The irony of Federal flood insurance is that premiums are priced below payouts and was $25B in the hole before these storms. No private insurance company will touch it, as it is such a bad risk, yet people complain that it is "too expensive".
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Old 09-09-2017, 07:01 AM   #14
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Yes, those without insurance are on the hook. That will be tens of thousands in TX and FL. One of the reasons that states apply for a Federal disaster designation is to extend the opportunity for low cost FEMA loans to these people. But there is a world of difference between insurance coverage (even if inadequate) and a low interest loan for the whole shibang. I don't begrudge having to foot the tax bill to extend low cost loans to people effected by this. Sure, some of these folks made stupid decisions to save a few bucks but many more just got a bad draw. It can happen to any of us. I lost a garage roof to a big snow storm in Chicago only to find out that isn't covered. Some people would say I was an idiot for not understanding my policy. But not many people do. I am sure there are gotchas where I am now, anything from a dirty bomb to who knows what.
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Old 09-09-2017, 07:55 AM   #15
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Did anyone else catch the interview with one of the Harvey victims who said "I don't know if I have flood insurance?" Wow. I feel for these folks but wow.
if its the sane one I saw I thought she said "I don't know if it's covered", which I can totally understand.

A few years back a city tree feel on my roof damaging it. I thought "easy peasy". aahhaa not so fast, insurance company balked. They said they cover tree damage from storms but not from "non maintenance". told me to make a claim with the city of Philadelphia. Oh hell no!! Now I eventually raised wholly you know what, but I find insurance companies can and do make stuff as obtuse as possible.

I have a whole bunch of friends with Jersey shore homes that had major battles after Sandy because what they "thought" was an easy claim turned out far different.
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Old 09-09-2017, 08:29 AM   #16
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$5K is not going to replace a house.... it was probably to help them move to some other place...

Some people get low interest rate loans to rebuild... not sure what happens if they do not pay it back...

I know that after Katrina there were many people here in Houston... about 40,000 IIRC... some where having their apt paid for 2 or more years after the disaster... some were in hotel or motel rooms for at least 1 year (paid for)....

I do not think you get free federal money to rebuild if you did not have insurance...
There is real tension between helping out our unfortunate neighbors and encouraging poor decisions.

There's a reason why the historic district in my town is up the hill at about 25 fee elevation from Long Island Sound-- because almost 400 years ago, the founders of my town knew that if they built their houses down on the sandy beach, they would get wiped out in a storm. Now there are wall to wall new mansions lining the beach. Periodically, they get damaged or destroyed in a major storm (the most recent being Hurricane Sandy), but they get rebuilt right in the same place, just waiting for the next storm to come along. And in the wake of every big house-damaging storm, there are always angry public meetings about why the state and federal government don't do more to help.

In my view, subsidized federal flood insurance just encourages bad behavior. I find it hard to ask poorer people who live 30 miles inland to help generally wealthier people rebuild on the beach. If you really want to take the risk to enjoy the view, you should get commercial insurance at market prices.
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Old 09-09-2017, 08:54 AM   #17
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There is real tension between helping out our unfortunate neighbors and encouraging poor decisions.

In my view, subsidized federal flood insurance just encourages bad behavior. I find it hard to ask poorer people who live 30 miles inland to help generally wealthier people rebuild on the beach. If you really want to take the risk to enjoy the view, you should get commercial insurance at market prices.
Yes, this is a problem in flood zones. I don't know what the answer is. Maybe phase out the Federal program? If you have insurance you can rebuild or get reimbursed for your loss once but after that the property becomes ineligible. Turn to the much vaunted private sector for those who want to stay?
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Old 09-09-2017, 09:57 AM   #18
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Yes, this is a problem in flood zones. I don't know what the answer is. Maybe phase out the Federal program? If you have insurance you can rebuild or get reimbursed for your loss once but after that the property becomes ineligible. Turn to the much vaunted private sector for those who want to stay?
If it is a good deal, private insurance companies will flock in. If it is a scam, people will cry to their politicians to "give us subsidized insurance".
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Old 09-09-2017, 09:58 AM   #19
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When someone says that then it means "No, I do not have flood insurance and I do not want to admit it"...

There is no way you have it and not know....
Hahahahah
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Old 09-09-2017, 12:26 PM   #20
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Yes, those without insurance are on the hook. That will be tens of thousands in TX and FL. One of the reasons that states apply for a Federal disaster designation is to extend the opportunity for low cost FEMA loans to these people. But there is a world of difference between insurance coverage (even if inadequate) and a low interest loan for the whole shibang. I don't begrudge having to foot the tax bill to extend low cost loans to people effected by this. Sure, some of these folks made stupid decisions to save a few bucks but many more just got a bad draw. It can happen to any of us. I lost a garage roof to a big snow storm in Chicago only to find out that isn't covered. Some people would say I was an idiot for not understanding my policy. But not many people do. I am sure there are gotchas where I am now, anything from a dirty bomb to who knows what.

True.... I got hosed on hail damage on my roof... I thought I had replacement coverage but there was a clause that did not do replacement coverage for roofs over 10 years... PLUS, the hail damage deductible was twice the normal deductible!!! I got a check for $5K for a $20K loss...
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