Flood insurance?

[Cataboo]

I'm not sure I understand your hesitation just because it's a federally run program. Are you going to not get medicare or social security because it's federally run? If you have no other options, medicare is better than nothing. Federally run flood insurance is again better than nothing.

You do have a short term loan with a low interest rate - but if you do lose that house to flooding, can you afford to rebuild it without flood insurance? I guess there's a chance to get money from FEMA if you don't have flood insurance.

A number of years ago, when I was in grad school, a tropical storm parked over the city I was living in for several hours - sending rain gushing through the city, and causing a ton of damage & flooding. Someone called me in the morning and said "are you okay?" I was living at 19th St & basically all the houses from 17th street on were condemned from the flooding. Most of the people did not have flood insurance because there was a flood wall on the river - but the flood wasn't from the river rising, it was from all the rain. I'd gotten knocked over and swept across the road from asphalt being swept down a hillside when I'd walked home from school.

So. Flood insurance seems like a good idea to me, especially if you know you live in a flood plain. although, I'm always absolutely boggled that people live in flood plains.

[OakLeaf]

I'm always absolutely boggled that people live in flood plains.

There are flood plains and there are flood plains. There are probably more people in the USA in the 100-year flood plain than not, I'd expect. And there's nowhere that isn't at very high risk of some natural disaster or another, whether it be earthquake, tornado, hurricane, lightning, mudslide, hail, blizzard ...

[PamNY]

Purely emotional, but I'd say get it. I know a couple of people who were wiped out by the flooding in Nashville, TN.

According to news reports I read, you need separate policies for house and contents (I don't know how accurate that is, but it was reported in multiple sources).

[indysteel]

A good portion of Central Indiana is in a flood plain, some areas worse than others. Granted, my current house may be at greater risk, but how much greater than my house in Indianapolis, I don't know. To suggest people are foolish for living in a flood plain ignores how much of the United States developed, i.e., along rivers and major waterways. You'd have to resettle a big chunk of people presumably to arid land--which presents its own problems. Plus, according to FEMA, one quarter of all claims are made by people in low to moderate risk. And these are just from people who carry the insurance.

My hestitation relates to sinking a serious chunk of change annually for something that may or may not happen. I am a Federal employee but have limited faith in some of what we do. I've heard and read too many stories about failed and delayed disaster relief so I think my question about whether it's a well run program is pretty valid.

Keep in mind that my house did not flood in the Flood of 2008, which most people agreed was THE 100-year Flood. So, while I will likely do it, I was trying to get my head around the risk versus cost. If we stay here 10 years, it's likely to be at least $16,000. That's not pocket change, nor obviously is losing our house and all of its contents either. So, yes, we're likely to get it. Thanks for everyone's input and information.

[PamNY]

My hesitation relates to sinking a serious chunk of change annually for something that may or may not happen. I am a Federal employee but have limited faith in some of what we do. I've heard and read too many stories about failed and delayed disaster relief so I think my question about whether it's a well run program is pretty valid.

Are you concerned about a claim being denied completely, or about delays/confusion as seems to happen (perhaps understandably at times) with FEMA?

I wonder if there's a way to find out something about how good the performance is.

[Biciclista]

if i lived where water could flow that high, i'd get flood insurance. So what if it takes a little longer than you like to get them to pay you? the alternative is to lose your house.

[Koronin]

Where we used to live (I did own the home) we were in a 500 year flood plain. The 100 year flood plain was on part of our property, but not where the structure was, so we choose to not carry flood insurance. If it was in the 100 yr flood plain my mortgage lender (Bank of America) actually would have required it. We are currently in the process of purchasing a home with a VA loan and they are not requiring flood insurance either. The home we are purchasing is not in a 100 year flood plain and is about 30 or so miles inland from the ocean. Now due to location (coastal county) the VA and the lender both require wind and hail insurance.

[bmccasland]

If your house and contents are damaged by rising water (a flood), then your homeowner's insurance will NOT pay. You do not need a federally backed loan (VA or FHA) to buy flood insurance. Whoever told you that didn't know what they're talking about. Flood is based on your risk area. Unless you happen to live on the high bank and know your home really is out of the 100 year flood plain, then you should get it. Also depending on your risk area, it may not be that much, or it can be as high as your homeowner's policy (which is what I paid living at -3.5 ft in the New Orleans area). Also 100-yr flood risk means that on average that bubbly creek will flood once every 100 years - but it could actually flood this year and the next year and the next year. Then not flood again for 200 years.

If you want to bear the complete recovery cost of a rising water / flood event, including loosing everything you own, then skip the insurance. Otherwise, buy flood insurance. It is a common misconception that homeowner's will cover flooding - it doesn't.

As to high-wind events, including those living in tornado alley - many homeowner's policies are requiring riders for high-wind or hail damage, an addition to your normal homeowner's policy. If you opt out of the rider, then have a high-wind event (tornado, hurricane), you may discover you're also out in the cold. Insurance companies exist to make money it seems.

[indysteel]

Are you concerned about a claim being denied completely, or about delays/confusion as seems to happen (perhaps understandably at times) with FEMA?

I wonder if there's a way to find out something about how good the performance is.

I'm worried about a significant delay or so much red tape that it becomes a full-time job. When you can't live in your home becasue it's covered in mold and all systems have been fried, then a significant delay could prove problematic.

[Catrin]

Good luck with your research and your decision making process. I wish I could add something constructive, I've always rented, but I am sure you and Mr. IndySteel will make the right decision.

[Biciclista]

I'm worried about a significant delay or so much red tape that it becomes a full-time job. When you can't live in your home because it's covered in mold and all systems have been fried, then a significant delay could prove problematic.

That's true but if you DON'T have that flood insurance it will be much worse.

[PamNY]

I'm worried about a significant delay or so much red tape that it becomes a full-time job. When you can't live in your home becasue it's covered in mold and all systems have been fried, then a significant delay could prove problematic.

If your home is wiped out by a flood, "problematic" will describe your whole life. If you have flood insurance, at least you will get money at the end of the delay.

After 9/11, everything took time. The government didn't even acknowledge that the dust was toxic until months after the event. Insurance issues dragged on for years.

Even so, getting something eventually was better than getting nothing ever.

[withm]

The FEMA Flood maps are revised periodically - what may not have been a "high risk" area as determined by FEMA a few years ago could well be one now.

That can explain why a lender who did not require flood insurance even just a few years ago, may have that requirement now (or vice versa) on the same property.

If you look at the survey you received when you settled on your house, if the flood elevation was performed, the survey would state what flood zone you are in (AE, A, etc followed by a number). This is your flood zone designation. But you'll still need the elevation certificate to go further.

When I was trying to buy gap insurance to cover only the perceived gap in coverage provided by my condo association and what the bank thought it should be (????) I learned that the insurance broker could not even quote this coverage without having the information on the elevation certificate.

Here's a link to the FEMA Elevation Certificate - this form needs to be filled out by a licensed surveyor. You'll be able to see the level of detail involved that is required to determine the BFE for your home. Only when you have the BFE for your home can you determine if flood insurance should be purchased regardless of any lender's requirements.

http://www.fema.gov/library/viewRecord.do?id=1383

You really need to have this done to make any kind of evaluation.

Incidently, the flood insurance program (like any other government entity) is often under attack. You may find this article interesting from the Feb 22 edition of Coastal Contractor. There is legislation being proposed to eliminate the Fed. flood insurance program. BTW, it states that all flood insurance is subsidized through this program, and suggests that there is no source for flood insurance outside of this program.

http://www.coastalcontractor.net/article/434.html

One other thing to keep in mind, there is a waiting period for flood insurance, in that if you buy it today, there is a 30-day waiting period for coverage. So if the hurricane is coming next week, you can't buy insurance now and expect to be covered next week. This period is waived when buying a new house.