Think You Don't Need Flood Insurance? That's What I Thought
If I’d known enough to have flood insurance on my house in Florida’s “low risk” zone, I’d still own my home free and clear
The call came at 4 a.m. when a panicked neighbor phoned with the bad news: “Get up! We’re flooded! Throw all of your towels and sheets on the floor and start mopping. Pull electrical plugs if you can. Try not to get electrocuted!”
I sat up with a start, slid off the bed and splashed into ankle-deep water. Wading through my house wildly throwing towels and blankets at the problem, I remembered my neighbor's warning about electrocution. I jumped onto the sofa to get out of the water, then leaned upside down to rip electrical plugs out of their sockets.
Meanwhile, water was seeping through windows and doors. A geyser-like fountain vented from the shower drain toward the ceiling. A flotilla of sopped books, magazines, pillows and shoes bobbed in the floodwater like unanchored buoys. My new wood floor was starting to buckle and carpets were saturated, not to mention the electrical power surge strips protecting my TV and computer. Venturing outside, I ran into knee-deep water in our courtyard.
A “staggering” deluge
A torrential rainstorm had snaked along the Eastern Seaboard in January of 2014, but the community where I lived, Florida’s Palm Beach County, took the brunt of it. Hardest hit were inland communities between Lantana and Delray Beach, where 18 to 22 inches fell in less than 24 hours. Roads, golf courses, shopping centers and parts of Interstate 95 were submerged in knee-to-waist-deep floodwaters.
The storm damaged close to 200 homes, created sinkholes, stranded and totaled thousands of cars and crowded hospitals with injured residents. Two people died from drowning just a few blocks from my house. The National Weather Service called the deluge “historic” and “staggering.”Yet the damage was not bad enough to merit the designation of a tropical storm or hurricane, and the flooding barely rated a mention in the national news.
Most of the victims lived six or more miles from coastal beaches in “low-to-moderate risk” flood zones, where owning a flood insurance policy is not required. The area around my home, in fact, had never before flooded. When shopping for homeowner’s coverage, agents had even discouraged me from purchasing a flood policy, as though they were doing me a favor and saving me money.
“There are a lot of misconceptions about flood insurance,” says Danon Lucas, an external affairs officer in Region IV of the Federal Emergency Management Agency (FEMA).“People need to know homeowner's insurance doesn’t cover them against flooding. But they can protect their home and property by purchasing a (federal) flood insurance policy separately through a local insurance agent.”
“Everyone lives in a potential flood zone”
Standard homeowners insurance typically covers water damage from broken pipes, water heaters or accidental overflows. But only The National Flood Insurance Program — created by Congress in 1968, administered by FEMA and obtained through private insurance companies — offers protection from rising waters and floods caused by hurricanes, tropical storms and other weather-related natural disasters.
Flood insurance is required for people who live in a Special Flood Hazard Area [SFHA], “high-risk” flood zone — areas identified and designated by FEMA and typically located along the coast or on flood plains. Jonathan Halpern, a Florida insurance agent with a national carrier, says policies are also required for certain other groups, including people receiving federal disaster assistance from a government agency.
“If you are not in a high risk zone, flood insurance is not required,” says Halpern. “But it’s a good idea to get coverage, just to be on the safe side because in theory, everyone lives in a potential flood zone.”
Doubters might want to reconsider. FEMA identifies flooding in the U.S. as the number one natural hazard. In the last five years alone, all 50 states have suffered floods or flash floods triggered by heavy rainfall. Between 2005 and 2014, total annual flood insurance claims on average topped $3.5 billion. Since 1978, the government flood insurance program has paid out more than $48 billion for flood insurance claims and related costs. The average claim per person tops $42,000 in damages.
A few inches can equal thousands in damages
“No matter where you live, it is important to remember that just a few inches of water in a home can cause thousands of dollars of damage,” says FEMA’s Lucas. “It is estimated that four inches of water in a home can cause nearly $10,000 in damage.”
And the damage costs from flooded homes will likely continue to mount as unusual weather emerges with increasing frequency, like the torrential storm that hit my community in Palm Beach.
“It is important to know your risk of flooding. Even if the risk is low, it does not mean you are risk free,” says FEMA’s Lucas. “Twenty percent to 25 percent of the National Flood Insurance Program claims come from flood areas designated as low-to-moderate risk.”
Buying flood coverage
Federal officials have found many people fear they are ineligible for flood insurance, either because they have been flooded before or because they don't live in a high-risk zone. Those fears are unfounded. “The truth is, as long as your property is in a community that participates in the National Flood Insurance Program, most homeowners, business owners and renters can get flood insurance,” Lucas says.
If you think flood insurance is too expensive, consider this. To fix my house, which had to be dismantled down to the studs, I had to apply for a flood disaster loan offered by the Small Business Administration after the damage in our area failed to meet criteria to qualify for FEMA grants.
I was lucky enough to have my application accepted and get a loan for $54,000, all of it earmarked to repair or replace my car, personal property and house. I received the first installment nearly five months after my house was flooded and the last nearly a year later, and each repair and purchase had to be painstaking documented. Generous as it was, the loan still wasn't enough to pay for all the damage. I also purchased flood insurance, a condition of the government loan, and paid a tad less than $350 a year for $75,000 of flood coverage.
And you can get a lot more coverage if you need it. In fact, the average amount paid for flood insurance is a modest $700 a year. Homeowners can insure their home for up to $250,000, and businesses, up to $1,000,000 for the property and the contents, according to FEMA. The limit on coverage for a home’s contents is $100,000, a policy that’s also available to renters.
Wish I had known all this earlier. Before the flood, my house had no mortgage and I was debt free. Now the government holds the lien on my house for the disaster loan, and I’ll be paying off that debt for the next 30 years.
Unlike the water that invaded my house, the effects of the trauma haven’t entirely subsided. With the advent of every storm, I find my heart skips a beat and I have to catch my breath. But at least I have some protection if disaster strikes again.
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