Homeowners whose properties were flooded by Hurricane Helen’s torrential rains are facing a bigger problem than just drying out: how to pay for the cleanup.
That’s because most Americans, including those in communities devastated by major storms, don’t have flood insurance.
As the aftermath of the hurricane’s catastrophic and deadly route across the Southeast shows, the alarming fact that the vast majority of people affected lack flood insurance means that the remaining Experts say it’s a wake-up call.
Along Florida’s barrier islands that stretch from St. Petersburg to Clearwater, mansions, single-family homes, apartments, mobile homes, restaurants, bars, and stores are completely destroyed by storms within minutes or large suffered damage. In hard-hit Pinellas and Taylor counties, storm-related casualty rates each ranged from 25% to 5%, according to the Insurance Information Institute.
The situation is even more dire outside the Sunshine State, where only 1% of flooded homeowners in Helen have flood insurance, the institute said.
One underlying factor is that flooding is not covered by homeowners insurance and requires separate insurance, often from the federal government. Flood insurance is required for federally insured mortgages on homes in areas classified as high risk by the Federal Emergency Management Agency. Many banks require flood insurance even in high-risk areas, but some homeowners end their insurance after paying off their mortgage.
Calculations about how many homeowners are at risk and how many are covered vary, but they are all bewildering.
FEMA estimates that since 1996, only 4% of homeowners nationwide have flood insurance, even though 99% of U.S. counties have been affected by flooding. The Insurance Information Institute offers a slightly higher number, saying about 6% of U.S. homeowners have flood insurance. , the majority (67%) are covered by the National Flood Insurance Program operated by FEMA, and 33% are covered through private insurance companies.
People have a “false sense of security”
When buying or renting a place to live, most people’s main consideration when deciding whether to purchase flood insurance is whether the property is located in a high-risk area. But that creates a “false sense of security,” said Georgina Sanchez, a faculty fellow and researcher at North Carolina State University’s Center for Geospatial Analysis. “This perception could deter residents from purchasing flood insurance,” as has happened in western and northern North Carolina, Sanchez told CBS MoneyWatch.
Sanchez’s center is coordinating the study with First Street, a Brooklyn-based nonprofit that is compiling a flood database that allows people to search for individual locations across the country. Access the present and future There is a risk of property flooding in those areas.
“Many of our homes, businesses and infrastructure are located within 800 feet, or about two city blocks, of the edge of the 100-year flood plain,” Sanchez said, adding that the region is subject to flooding. The company said it is considered a risk and is used to set insurance premiums. .
A recent national study found that 24% of the places people are building are located in the buffer zone, or just outside the 100-year flood zone. “We all love living near water,” she said. “But we’re at a point where we have to ask ourselves, do we want to continue to put people at risk?”