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Flood Insurance? Earthquake Insurance?
Old 08-23-2016, 03:30 PM   #1
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Flood Insurance? Earthquake Insurance?

I'm sitting here listening to a story about all the people in Louisiana who didn't have flood insurance because they weren't in a high risk zone.

This led me to check our policy, and at the advise of a now-retired State Farm cousin, we do have a drain/pipe/sewage rider, but I'm not sure that would cover a true flood. Would it? Do you get flood insurance from your regular agent? Yes, I have a call into mine, but just wondering what y'all think or know.

Do you have flood insurance?

We also have an earthquake rider because we are in "a zone" and for $25 a year, it helps me sleep.

Do you have earthquake insurance?

No, I'm not running a pole.
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Old 08-23-2016, 03:39 PM   #2
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We looked into it when we moved to WV but the insurance agent said it had to be purchased from the federal flood insurance, uh, something. Our house is high enough that half the neighbor's rooftops would be under water by the time we got a wet basement so I don't worry about it. In the 14 years we've been here there have been some heavy rains and we never came close.

Having smoke alarms is a $48 credit
Sinkhole collapse coverage - $134
Earthquake damage coverage - $76 with 2% deductible
Sewer or drain backup coverage up to $5k - $35
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Old 08-23-2016, 03:44 PM   #3
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We live in a flood zone and have flood insurance. I don't doubt that at some point over the next decade (or two) we're going to need and use it. Our agent secures the policy but it is from a separate insurer, one of the federally regulated policies that Walt34 mentioned.
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Old 08-23-2016, 03:50 PM   #4
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had flood insurance in houston, yes it's federally issued

no earthquake insurance but we might need it?
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Old 08-23-2016, 04:10 PM   #5
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As to flood insurance it is only required for a mortgage if you are in the 1% chance of a flooding event area. (you can find maps of your area on line ) Further you can find maps of earthquake risk online. Beyond that if you are in low risk areas it depends on how much you want to pay for insurance versus how much you are willing to self insure.
One can go broke paying for insurance for events with low probabilities. While for flood I might move the limit to .2% per year (500 year event)
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Old 08-23-2016, 04:59 PM   #6
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Quote:
Originally Posted by SumDay View Post
This led me to check our policy, and at the advise of a now-retired State Farm cousin, we do have a drain/pipe/sewage rider, but I'm not sure that would cover a true flood. Would it? Do you get flood insurance from your regular agent? Yes, I have a call into mine, but just wondering what y'all think or know.
A drain/pipe/sewage rider will not cover flooding from storms.

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Originally Posted by meierlde View Post
As to flood insurance it is only required for a mortgage if you are in the 1% chance of a flooding event area. (you can find maps of your area on line ) Further you can find maps of earthquake risk online. Beyond that if you are in low risk areas it depends on how much you want to pay for insurance versus how much you are willing to self insure.
One can go broke paying for insurance for events with low probabilities. While for flood I might move the limit to .2% per year (500 year event)
Yes, flood insurance is very expensive for the coverage it provides, which in itself says why it may be needed. Even a little water can cause catastrophic damage to a house when mold gets in behind the walls.

We are in a x500 zone (0.2%) but the entire area is 1%, so our lower risk is a technicality I choose to ignore. At least twice in the last year there has been flooding in the county and in neighboring counties.
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Old 08-23-2016, 05:10 PM   #7
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We have neither. Per FEMA, fortunately:
  • We're in an "area of minimal flood hazard, usually depicted on FIRMs as above the 500‐year (unshaded) flood level."
  • We're in the lowest risk earthquake category - "Seismic Design Category A – Corresponds to buildings in areas where expected ground shaking will be minor. Good Soils."
Glad we don't need to worry much, we'll probably see an ark before we have an issue?
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Old 08-23-2016, 05:20 PM   #8
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until I sold my home last month I had earthquake insurance. I lived in between Golden colorado and the old Rocky flats nuclear site. back in the 1980's Rocky flats caused some earthquakes by pumping some fluids underground. they quit shortly thereafter, but that spooked me enough that I kept the coverage all these years.

I'm thinking that with those swams of fracking earthquakes in some places, more people might need earthquake insurance than we would think.
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Old 08-23-2016, 06:17 PM   #9
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When the New Madrid fault ruptures again, a lot of people in the Midwest that thought smugly they did not need earthquake insurance will find out they did need it.
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Old 08-23-2016, 06:35 PM   #10
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We live on a small hill with about a 30 ft drop to the lake. If water gets to our house it will be about 10 ft over the dam. So no flood ins. here. However, when we were in Houston we did have it even though we were not in a flood zone and it was not required. Houston is flat! If you get a slow moving thunder storm it will flood. That has been proven more times than I like to remember.

Earthquake, not a problem here.
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Old 08-23-2016, 06:43 PM   #11
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I live in Southern California-used to live 3 miles from the epicenter of the Northridge quake. The problem we had was we lived in a condo and there was a 10% deductible on the entire structure! So with 4 units at $350K, we would need 140K worth of damage before they would pay anything.
P.S. We had maybe $200 worth of damage, but people further away really got hit.
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Old 08-23-2016, 07:30 PM   #12
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In mountain flood zones the concern for homes isn't with rising standing water but with the damage caused by overflowing streams and flowing water. It's especially dangerous during the first few big rains after a forest fire. The fire causes the ground to be harden so no water is absorbed when it rains. All that extra rain runoff quickly overflows the streams and starts picking up trees and boulders while it's coming down the mountainside. If your house gets in the way it has no chance. All flood insurance out here is purchased through the Federal program.
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Old 08-23-2016, 07:39 PM   #13
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We have earthquake insurance through our condo HOA, and yes, it has a 10% deductible. We're only 4 units in 2 buildings though. I'd never have voted for it, but they had it before we bought.
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Old 08-23-2016, 08:04 PM   #14
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I think you really need to assess your own property details, and not depend solely on FEMA maps that your mortgage co (if you have a mortgage) may use to determine if they require you to have it, and yes per my insurer it is both expensive and provided by a separate federally regulated co that specializes in flood ins. Based on the experience of a colleague back when i was working, the FEMA maps do not address details too well, such as local creeks (rather than rivers and major tributaries of rivers). The colleague had his house flooded due to an overflowing creek on the adjacent county park property plus the fact that his lot had the house located in the lower part (very scenic) where the creek water tended to flow when it overflowed the banks. NO flood ins, but fortunately a lot of help from friends, relatives, and a fund the employee association set up....good to be popular with colleagues as it garnered him and his family a lot of sympathy. Still, it was a financial hit and will make ER be put off by up to 5 more yrs. So, consider both adjacent water sources and your lot topography and house location. I have a creek on adjacent park property also, but the house is on the highest point of a an acre plus lot, so I too will see neighbors houses almost under water before I have any flooding. There was a magnitude 3.2 earthquake here about a decade ago, in metro Atlanta. it woke me up, but no damage, so no earthquake ins either.
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Old 08-23-2016, 08:41 PM   #15
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I live in Silly Valley, between the Calaveras Fault and the San Andreas fault. I had earthquake insurance for a few years, but as the replacement cost and corresponding deductible increased, I dropped it. The house is on a hill and sits on rocky soil with bedrock underneath. There was no damage in the Loma Prieta earthquake of 1989 other than a couple of small sheet rock cracks. The house is bolted to the foundation and there are no cripple walls. It would take a really strong earthquake and/or some bad luck with wave amplification to do significant damage here. At 15 percent deductible, the dollar amount would have to be close to $100,000.

The real problem with earthquake insurance is that a very serious earthquake would likely render the insurance fund unable to pay all the claims. My guess is that the claims would be paid at a percentage, maybe less than 50 percent. Add the deductible, and my house would have to be destroyed to make the insurance worth the cost.

Floods? Along creeks and rivers and in low lying areas near the bay, yes. Up here? Not so much. I could see a couple of inches in the garage in an hours-long downpour that clogged the storm drains, but the house is on a raised perimeter foundation with a slope to the back of the lot. The water will go around the house. So I skipped the relatively inexpensive flood insurance.
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Old 08-23-2016, 08:56 PM   #16
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We live in the area that just flooded in Louisiana but fortunately are not in a flood zone and did not flood. But we are 1 mile from the Mississippi River so if it ever ruptures we are covered. Honestly we've had flood insurance since 1989 when we had water to our front door in another town. That house did flood a couple months after we sold it.
I'm not positive but think that flood insurance will cover erosion of your slab? It's cheap if you're not in a flood zone.
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Old 08-23-2016, 09:09 PM   #17
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I just checked floodsmart.gov and the premium for 250 k of dwelling and 100k of contents is 474 a year if you have a basement and 424 if you do not and live in B,C,X areas. Note that you can also locate an agent on the web site some 80 companies act as agent for the federal government.
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Old 08-23-2016, 09:10 PM   #18
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At 15 percent deductible, the dollar amount would have to be close to $100,000.

The real problem with earthquake insurance is that a very serious earthquake would likely render the insurance fund unable to pay all the claims. My guess is that the claims would be paid at a percentage, maybe less than 50 percent. Add the deductible, and my house would have to be destroyed to make the insurance worth the cost.
My same logic when I used to live in CA. The deductible is so high that your house has to be essentially ruined before any payment. So I never took it out.

I have never lived in any type of flood zone area, so no experience with that, or the cost of it.
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Old 08-23-2016, 10:27 PM   #19
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Don't have either.

We did years ago have a tremendous rain storm, we were fine until the power failure. caused the sump pump to not work.

As we went around the neighborhood we saw houses down the hill had water shooting up from the sewers lifting the big metal covers about 6 or more inches with the water shooting out from under it. I bet their sewers backed up.
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Old 08-23-2016, 10:33 PM   #20
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We have neither. Earthquakes are rare around here.

We live on a lake... the water is less than 30' from where I am sitting right now. No flood insurance. The last major flood was Hurricane Irene in 2011... the water got to within 3" of our walkout basement (vertically... 3" higher and it would be coming in the door). My understanding is in our area Irene was considered a once in 100 years event. The FEMA flood zone map is along the lakeshore.. the water is typically 3' below the front lawn. When I went to bed that night I fully expected that the walkout basement would be flooded in the morning but the water peaked before it came in the house.

If I sandbagged the walkout entry I would pick up another 12+" that the water could rise before it would get into the basement... worst case if it did we would have a bit of a mess to clean up and some drywall to replace.
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