Experts say that most of the homeowners whose properties were severely flooded during Hurricane Harvey lacked insurance – an oversight that has left many on the slow and arduous road to recovery.
Robert Hunter, former insurance commissioner of Texas and the current director of insurance at the Consumer Federation of America, believes that as many as 80% of Harvey victims did not have any flood insurance. Analytics company CoreLogic suggests that the figure for uninsured damage is closer to 70%, based on its flood and disaster risk data.
Hunter explained to Dallas News that there were several reasons why many homeowners – especially in cities such as Houston, where the flood damage is more apparent – lacked the necessary flood insurance to protect them from the effects of Harvey.
Chief among them is the fact that many of the homes that flooded during the record-making hurricane incident were not in an area designated by the federal government as a 100-year floodplain – an area estimated to have a one-in-100 chance of flooding each year. Residents living outside of the flood zone were not required to purchase flood insurance and most did not, Hunter pointed out. He also said that the flood maps used were outdated, and were likely too conservative since newer construction could spread the flood risk to more areas. He added that infrastructure developments such as roads and buildings, “drives floods up, just like if you sit down in a bathtub the water goes up.”
Hunter suggested that another factor that led to the high level of uninsured flood damage is that some banks and lenders failed to ensure that residents in flood zones had purchased the necessary insurance.
He also remarked that many people simply did not want to pay for the insurance. A yearly policy can cost from $400 to as much as a couple of thousand dollars, depending on the property’s risk and value. Some homeowners think that such a rare disaster is not worth the cost and forgo the insurance, he said.
Immediately following disasters, there is a rush to purchase insurance. However, Hunter said that as time passes, many homeowners drop the insurance because of the expense and the feeling that it might not be necessary.
“Just because they have it today, doesn’t mean they’ll have it when the next flood comes,” he told Dallas News.
Related stories:
FEMA to recover funds from the private reinsurance markets
How much did insurance pay for world’s costliest natural disasters?
