My Question Since Hurricane Harvey: After Three Years of Consecutive Flooding in Houston, Why Isn’t Flood Insurance Required?
I just purchased my first home. Most people told me that it would be one of the most exciting experiences of my life time. It was. For about 24 hours. I closed on my new home on August 24, 2017, a day before Hurricane Harvey started dropping millions of gallons of rain on Houston and the surrounding counties. The home that I purchased was not located in a floodplain. I was not required to buy flood insurance. However, I had not lived in this area or neighborhood before. I had no idea whether or not flooding was a concern. Thankfully, unlike so many people in the greater Houston area, I was sparred and did not get water in my new home. However, after Harvey and the other flooding that took place on Tax Day 2016 and Memorial Day 2015, the issue is why flood insurance is not required for every home in this area?
There was a recent article on that subject in Huffington Post that asked the same question that I did – why don’t we all have flood insurance? The article said that 80% of homeowners in Houston lacked flood coverage and this does not surprise me. Flood coverage is not required unless you live in a floodplain and most homeowners probably think that their home is safe from flooding if they are not located in a floodplain but the last three years proves this is not correct. For example, more than 25% of flood claims are from policyholders who do not live in a floodplain. So, even if you are not required to have flood coverage if you do not live in a floodplain, it does not mean your home is safe and will not flood. Early assessments of Hurricane Harvey show that many homes that flooded in and around Houston and Harris County area even though they were located far from the designated floodplains.
The purpose of this blog is not to try to sell flood insurance. It is an additional expense and the rates can vary dramatically. How much a homeowner ends up paying for flood insurance depends on the location of your home, its elevation and proximity to a floodplain, whether it has a basement, the age of the home, the roof and many other factors.
When trying to decide whether or not you should carry flood insurance, expects suggest any homeowner should consider the following:
• The average flood claim for U.S. homeowners is about $39,000.00.
• Just one inch of water in your home can easily run up costs of $20,000.00 or more, which might be a low estimate to replace flooring and appliances and treat mold issues and address other problems associated with flood damage.
• Bankrate says the average annual premium is $660.
• FEMA says that the average premium to insure a home that is a low to moderate risk property is about $420.00 annually (or $1.15 per day).
Flood insurance does not take effect immediately, meaning you cannot wait until a hurricane is within days of making landfall to obtain flood insurance. There is a 30-day no claims period from the time you buy flood insurance until the time you can file a claim.
One thing is certain, flooding seems to be the new norm here in Houston and the surrounding counties. I know most meteorologists said that the Memorial Day flood of 2015 was a “100-year flood.” The issue, however, was the same thing happened on Tax Day of 2016. And then, Harvey hit. Homeowners insurance does not cover floods or damage resulting from flood waters. Though carrying flood insurance is an additional expense, I think the question to ask yourself, as a homeowner, is whether or not the additional money per year will provide peace of mind in case something similar to Memorial Day 2015, Tax Day 2016 and Harvey 2017 should happen next year. Though my home did not take in any water despite the large amount of rainfall, I will still carry flood insurance as long as I can afford it. The cost of the yearly premium pales in comparison to the average costs to repair and replace items in your home if it takes in even an inch of water. Not to mention the devaluation of your home’s resell value if it is flooded. I am not trying to sell flood insurance but I definitely feel it is something that every homeowner in Houston and the surrounding counties should consider after three consecutive years of flooding.
For more information about flood insurance premiums, talk to your local insurance agent or go to FloodSmart.gov. For any and all of those affected by Hurricane Harvey, my thoughts and prayers go out to you all during this time.
Information obtained for this blog from the Huffingpost.com article entitled “Flood Insurance Could Save People From Financial Ruin, So Why Don’t We All Have It?” dated September 7, 2017.