Weather Center

When Floodwaters Rise, What’s Covered?

By Peter Simek 1.3.18

In the aftermath of Hurricane Harvey, thousands of homes lay destroyed by the floods that followed the storm, and only 20 percent of them were covered by flood insurance.

Unfortunately, that story is all too common. Flooding is one of the major causes of loss that is not covered under a regular homeowners or renters policy. That’s because flood insurance is regulated differently from other kinds of insurance.

The Federal Flood Program

Flood insurance is a tricky business. The damage that floods create is often so immense that it’s impossible for private insurance companies to make issuing policies viable. That’s why, in the wake of flooding caused by 1965’s Hurricane Betsy, the National Flood Insurance Act of 1968 was passed to create a federally backed flood insurance program, which is administered by the Federal Emergency Management Agency (FEMA).

FEMA creates the standards for coverage and sets premiums and rules around purchasing policies. That includes limiting when you can purchase flood insurance. Sean Hartgrove, a Senior Texas Farm Bureau Insurance Agent in Houston, remembers a would-be client trying to purchase flood insurance as their house was flooding during a torrential rain event. FEMA’s restrictions make this impossible.

When you purchase flood insurance, your coverage does not go into effect until 30 days after you make your first payment. And ahead of weather events like last year’s hurricanes, the National Flood Insurance Program ceased issuing policies — which only partially explains why so many homes weren’t covered.

The Problem With Floodplains

FEMA also regulates designations of standard floodplains, preferred floodplains, and non-floodplains. If you live in a standard floodplain, you are required by mortgage companies to purchase flood insurance.

This can give homeowners a false sense of security; many believe that if they’re not in a mandated flood zone, they’re not at risk of flooding. But flooding can occur nearly anywhere in Texas, and it doesn’t always follow the logic of man-made zones.

That means, if you’re looking at FEMA’s flood maps, that might not be sufficient information to help you decide whether you’re at risk and want to purchase an optional flood insurance policy.

“Contrary to popular belief, the vast majority of the flooding [during Hurricane Harvey] occurred in preferred [as opposed to standard] floodplains,” Hartgrove says, where “it had never flooded — people had never seen it flood past the curb.”

Hartgrove says homeowners should also beware of becoming overconfident when they experience a storm event and are not affected. “After weathering several storms, people get this super[hero] mentality.” They think, “If that is all that Mother Nature can throw at me, it would take a tsunami [to flood my home].”

In fact, Hartgrove advised that FEMA will be looking at Texas’ flood zones and will potentially redistrict following the devastation of last fall. He recommends that homeowners in preferred floodplains buy policies now, before they are potentially rezoned to a standard floodplain, so they can lock in the preferred rate. Make sure to do some research — your Texas Farm Bureau Insurance Agent can also help you consider those options.

How Your Coverage Works

Some have argued the federal flood insurance program helps incentivize the building and purchasing of homes in flood-prone areas. Others have pointed out that premiums don’t cover the cost of rebuilding flood-ravaged homes. A series of reform acts passed in the 2000s and 2010s have attempted to address these issues, but Hartgrove says the reality on the ground is that there are plenty of homes at risk that are not required to purchase insurance.

As Hartgrove says, “Unless you are on the side of a mountain, you are in a floodplain. If you are on planet Earth, you are on a floodplain.”

Flood insurance covers strictly damage to a home inflicted by rising water. It will cover all the contents of your home, as well as required repairs to the dwelling. Conversely, your homeowners policy will cover only water damage that comes from inside the house, such as a burst pipe.

Because the flood insurance program is regulated by a federal agency, premiums are fairly standardized. For example, coverage on a $250,000 dwelling with $100,000 in contents will typically carry $450 in annual premiums, Hartgrove says.

Go With a Trusted Source

That said, not every insurance company that offers flood insurance is the same. Having coverage is one thing — but actually receiving compensation when the unthinkable event occurs is another.

The good news is that even though the national flood program is federally backed and regulated, you still get to buy your policy from your insurance company. That means your Texas Farm Bureau Insurance Agent can answer all your questions and help you navigate your options.

It also means you can go with a name you trust. Hartgrove says that, in Houston, Texas Farm Bureau Insurance settled 85 percent of claims within 45 days of Hurricane Harvey. “When you charge a fair premium, you can afford to pay the claims in a timely matter,” he says.

Call your Texas Farm Bureau Insurance Agent today to discuss your flood risk and your best insurance options, and take extra precautions with this guide to flood preparations.

Coverage and discounts are subject to qualifications and policy terms and may vary by situation.

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