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View Full Version : Flood insurance, what's the real story?



Reynard38
01-27-2014, 09:08 AM
I'm sure some of y'all live in flood zones. We are getting close to buying a lot near Charleston on either a tidal creek or the intercoastal. We will certainly build to the new specs with regards to elevation, blowout walls etc. All the new construction is elevated.
Have your rates skyrocketed up as the media is reporting?

Ian McColgin
01-27-2014, 09:21 AM
There's a major fight going on with our congressman quite active. The redrawn flood maps indicate a huge danger zone and are jacking the rates big time. Almost weekly the paper has another poignant story of someone unable to afford the home that's sheltered the family for a century or so. Those stories are important because people like me have no sympathy for the rich pigs whose McMansions have metastasized along the shore, spoiling my view when I go sailing, and with insurance effectivly subsidized by people with homes more rationally sited. But they are the ones to whom Rep. Keating is really listening.

It's quite possible that the maps were drawn wrong by a bit. Up here the argument is that the models developed for coastal Florida are not relevant here, and that's likely true.

But long run, reform of flood insurance will have more to do with ending cross subsidy of the rich shorefront property owners - remember that cabinet secretary or whatever to whom President Bush promiced a rebuild after Hurricane Katrina? - and better shaping housing and commercial development. Those reforms can be assisted by market incentives if they are rationally planned but they cannot be caused by an unplanned market.

MiddleAgesMan
01-27-2014, 09:24 AM
Yes. Rates have skyrocketed in recent years. I finally let mine lapse once I paid off the mortgage.

Friends at the beach report the worst increases...about 300 percent in the most recent year.

Breakaway
01-27-2014, 09:43 AM
My rates have gone up 6 times since I have been in this house which is 11 years. I have been rezoned along with the rate increases, to be placed in a more vulnerable zone. I am not waterfront I am across the street from waterfront and in the same zone as they are now.

To be fair, I have had two claims-one for Sandy and another for a Nor'easter about 8 or 9 years back. The total of both claims exceeds what I have paid in premiums over time. BUt if similar damage were to occur again, now that I am paying thousands per year instead of hundreds, I doubt that would be the case. (My flood damage,aside from some salt-killed grass and and plants, and a shed that went cattywompus and had to be re-leveled, has amounted to central air unit and heating system replacement; I have no finished basement, and water has not yet ever reached the floor joists or higher.)

Kevin

ccmanuals
01-27-2014, 09:58 AM
Make sure you have updated official FEMA maps. These maps are important in getting the subsidized rates.

MiddleAgesMan
01-27-2014, 10:02 AM
Savannah is in a bight so a direct hit from a hurricane is extremely rare and unlikely. Even though my 40 year old house is on a slab there has never been water flooding the yard much less the house. Newer houses adjacent to mine are elevated about 50 inches higher than mine. Their lots got about 3 feet of fill yet water has yet to build up on my lot. FEMA had to buy several houses on this island because they sat in low areas and flooded every couple years from hard rains. Mine? It seems just fine.

Since it would likely take a direct hit to cause my house to flood I figured letting the flood insurance go was worth the gamble.

Breakaway
01-27-2014, 10:08 AM
FEMA had to buy several houses on this island because they sat in low areas and flooded every couple years from hard rains.

Are you sure about this, MAM? AFAIK, flood insurance only covers damage from swollen rivers, storm surged bays or ocean etc. That is, floods from bodies of water. Water from torrential rain or rising groundwater is considered "seepage" and not covered.


Kevin

Brian Palmer
01-27-2014, 10:43 AM
Here is a good overview that our local paper did as a feature:

http://www.pennlive.com/midstate/index.ssf/2014/01/what_could_cost_1_billion_in_l.html#incart_river

Brian

John Smith
01-27-2014, 10:45 AM
I know the cost of flood insurance in Seaside Heights was more than most could pay. My daughter's house would have had a $2000 a month premium.

I have a problem with storm surge being a flood. It's caused by wind. To make an analogy: If car 1 hits care 2 and drives car 2 into car 3, car 1 is responsible for damage to car 3.

If wind caused the water to rise, it should be considered wind damage. IMO.

John Smith
01-27-2014, 10:48 AM
I have to tell you a tragic, but funny, story about flood insurance.

We lived across the street from a small group of stores. I happened to be in one of those stores to witness a conversation between Joe, the deli owner, and his insurance agent. The nearby creek had overflowed and the basement of his deli (and the other stores) was flooded and all his stuff, including compressors for freezers and such, was destroyed.

He did not have flood insurance. He could not get flood insurance. The agent explained to him that he is not in a flood zone, because it does not flood in this area. Joe kept pointing to the basement.

MiddleAgesMan
01-27-2014, 09:55 PM
Are you sure about this, MAM? AFAIK, flood insurance only covers damage from swollen rivers, storm surged bays or ocean etc. That is, floods from bodies of water. Water from torrential rain or rising groundwater is considered "seepage" and not covered.


Kevin

I know one of the owners of a house (he is/was a cabinetmaker like myself, and we had worked together at times in the past) that was bought by FEMA. Yes, his place repeatedly flooded during torrential rains.

It's my understanding "flooding" happens when water rises for any reason, including wind-blown water during a hurricane. The insurance industry and many home owners fought many court battles when Katrina ravaged the Gulf coast. Owners that could prove roofs were blown off allowing water into the house were paid off even if they lacked flood insurance. If damage was due to storm surge or wind-blown water from the sea owners lacking flood insurance were SOL.

skuthorp
01-27-2014, 10:29 PM
Many of our flood maps are based on historical floods, and seeing we haven't been here long the info is probably inadequate. There was a plan to raise the wall of the biggest dam supplying Sydney, but research indicated an unrealized flood height and I think the plan was scrapped

Tom Wilkinson
01-28-2014, 12:19 AM
My rates haven't changed much in the fours years I have had it. I went for many years without but when I refinanced I had no choice but to get it.

Reynard38
01-28-2014, 09:10 AM
I did read in one article that the rising rates have drawn the interest of Lloyd's of London. They couldn't compete against the subsidized rates, but with the increases they'd are considering entering the market. Competition could/should lower the cost.

David W Pratt
01-28-2014, 02:32 PM
Our house was built in 1804, so it has survived 200+ years of destructive testing, including the hurricane of 1938