Flooding is separate from typical US home insurance and many homeowners are not adequately covered
As millions of US residents begin working to file insurance claims on their homes in the aftermath of Hurricanes Helene and Milton, many could be denied, particularly if their homes were damaged by flooding.
A quirk in the US home insurance market is that flood insurance is separate from typical home insurance, which usually covers wind damage from hurricanes but not flooding. Homeowners must purchase flood insurance separately if they want their homes protected against flooding.
And many don’t. In some areas where Hurricane Helene hit the hardest, less than 1% of homes had flood insurance when the storm hit. In Buncombe county in North Carolina, home to Asheville, only 0.9% of homes had flood insurance, according to data from the Insurance Information Institute.
The number of people with flood insurance in Florida, which was hit by Hurricane Milton two weeks after parts of the state were battered by Helene, is higher than in other parts of the country. But still, the take-up is low. In Sarasota county, which took a direct hit from Milton, just 23% of residents have flood insurance.
It’s the dental of home insurance.
We carry flood insurance, it’s cheap if you are not in a flood zone.
But the home insurance in Florida is mostly just a scam to suck money out of the state. Company is incorporated, funnels money from policies into the pockets of the rich, then they go bust and fail to pay claims. Then the same people start all over with a different name. While cherry picking policies and leaving the riskier for the state to insure.
If Florida would kick all the insurers out and put everyone on Citizens it would be better. I really only feel “insured” when we fall onto the state plan; and if I had a spare half million you bet I’d self insure and get an umbrella policy for liability, not keep paying those assholes for nothing.
I had flood insurance for a long time, in a non-flood zone. It was cheap and it made sense since storm water sometimes runs across my back yard.
Until one day I thought we got close to needing to use it. I spoke to somebody at the insurance company and got to know my policy on my own a bit.
It doesn’t matter how bad my house might flood. A flood claim would not matter unless either a 2 acre area flooded or a neighbor’s house had a nice flood claim too.
Lot of fucking good that does for somebody with a small yard who lives on a hill! I actually got rid of the policy years ago.
Insurance is a straight up scam. In every case.
Nah, in this case I blame the government for not having clearer regulations and a lack of informational programs.
Maybe all insurance should cover floods - but if we wanted that we’d need to regulate it… these policies were sold without flood insurance and it’s quite likely the sellers tried to aggressively upsell them to also get flood insurance.
Maybe the insurance should be government run but we need insurance - health insurance is a scam because it’s a fucking fake market, but housing insurance has a healthy market and insurers that reneg on their contract get taken to court and pursued by some truly asshole lawyers… you might argue that falsely denying a claim should come with higher penalties (and I’d agree) but half our government thinks regulations are the fucking devil.
Insurance is an inherently good idea - if we shuffled things up so that none of these people had any insurance then we’d have foreclosures and homelessness across the south right now - insurance companies are dicks but insurance is a good thing to have.
How can insurances make billions of profit if it isn’t a scam?
Isn’t it supposed to be a system to share the cost of damage, not to rip off people?
Yup, it certainly rakes in excessive profits - but the core concept of insurance isn’t a scam. It’s a good idea that gets abused in the American market.
Hmmm, I don’t get this. Usually if you’re in a flood area the mortgage company requires flood insurance. If you don’t get it, they get it for you and send you the bill.
But as most are saying, it’s a scam. They will tell you you have flood insurance without mentioning that there are three different kinds of flood damage. Rising water is the one most of us think of, but there is flood damage cause by plumbing issues and finally wind driven water. To a home owner, it’s water damage. To an insurance company it’s an opportunity to either charge you three times or deny your claim.
It’s great!
Insurance companies get away with the most fucked up shit as a matter of course and nobody holds them accountable.
To be fair… They would have been happy to have sold these people food insurance. How many would have purchased it even if they knew more about it? How keen are you to listen to your insurance company trying to “upsell you shit you don’t need?”
Insurance companies have a conflict of interest inherent in their business model. They make money by taking your money up front and then paying you back as little as possible at a later date. Any way to weasel out of paying up, especially in a big event like a hurricane, is a huge money saver for them. And most people are desperate. Their house is gone. They aren’t in a position where they can argue and sit on the phone for hours and work it out.
Also as soon as they pay you out they either jack up the rates to recover what you paid or drop you entirely as you’re no longer profitable. It’s such a massive conflict of interest
And then, even if they do pay out, they just jack up your rates to make it all back. That’s if they don’t just drop your coverage completely.
We need some kind of ACA for regular insurance, where unless people are literally building in a swamp or the bottom of a crater near a lake/river they should be just automatically covered.
Florida is uninsurable, that’s kinda the issue.
There’s a reason so many big insurance companies have left Florida. And honestly I don’t really want even more Federal money going to rebuild in the most common path of ever rising hurricane intensity.
I want Federal funds set aside to move people out of Florida in homes elsewhere for those who want it. If you want to rebuild your house in the path of the hurricane you can do it on your own dime.
Not sure how we relocate basically everyone in the South though. And what about tornado alley, do we move all those people also? And then you have wild fires and earthquakes, do we move all of California also? I get what you are saying, but getting millions of people to move states or across the country isn’t a simple thing. And what do we do with all the then empty previously “high valued” real estate? I do think we ultimately have to do something as global warming continues to cause humans issues at what seems like an accelerated rate, but we also have an alarming number of people that do not want to address it (or that even deny it happening).
Not sure how we relocate basically everyone in the South though. And what about tornado alley, do we move all those people also? And then you have wild fires and earthquakes, do we move all of California also? I get what you are saying, but getting millions of people to move states or across the country isn’t a simple thing. And what do we do with all the then empty previously “high valued” real estate?
From your previous post, your answer to your question is: You don’t move them. Instead you skyrocket the rates of insurance on the rest of the nation so that people can continuously have their houses in high risk area destroyed and rebuilt while the rest of the country pays for it. This is what an “ACA for home insurance” would do.
A more realistic approach would be to change the building codes to accommodate specific natural disasters for that geography. You want to build a house in the woods? Now you need a significant fire break around the house and need to build the house out of fire resistant materials if you want coverage. This is discussion of building regulation changes is already occurring. Same thing for houses in hurricane areas. If you want to build there, you have to build houses that will survive there and not be destroyed by the inevitable conditions.
None of this large transition is completed overnight, but it has to start happening now. What we have now is unsustainable.
I think housing like this might be a smarter move than trying to move millions of people (or leaving them homeless).
I think housing like this might be a smarter move than trying to move millions of people (or leaving them homeless).
First, I like those homes, but there’s a HUGE problem with your proposal.
From your linked article:
"But these features come at a cost. According to the community’s website, the homes are selling for $1.4 million to $1.9 million, compared to other new homes in the area priced for at least $600,000. "
Who are you suggesting pays for each person currently in FL to get a $1.4 million to $1.9 million home?
Well I would assume some of that comes from the lower volume of building the homes, with less people in construction in the area possessing the skills/materials to do so. Perhaps if the government put money towards volume buying materials and securing contractors able to build them, the price could come down to “market” values. I would think insurance companies would also see it as a win not having to payout as much for those that can actually be insured (and maybe makes it so more people can actually be covered making the graph go up).
I could be way off and the pricing of those homes are just unable to come down to an acceptable $ value, but government/insurance money would be put to better use looking to build more future climate safe homes as close as possible to the above model instead of today’s standard.
There’s a UK scheme called Flood Re that does this kind of thing. If you’re more than a certain probability of flooding, you need to go with an insurer that’s backed by the government’s reinsurance policy.
That’s basically how US flood insurance works. The entire country is mapped out in flood zones based on a every 100 year occurrence. If you’re in the zone you’re required to buy insurance… but it’s bullshit. They have a bunch of inland people paying the same rate as the people’s houses that are on the coast and flood every 5 to 10 years.
Insurance was always a last case resort and not submitting claims because of a paint chip. Now that climate change is showing its face and you built along a beach which everyone has warned you about and needs constant replenishing. Sorry if I am having a little trouble finding some empathy here.
Note that a lot of the people that are in trouble this time are hundreds of miles inland in mountains… .
Climate change affects the entire planet. I was simply pointing the most obvious example. What happened in west NC is tragic but this is the new reality we face and the entire south and eastern coast line requires a rethink of how we insure and more importantly how we build in the future.
What would actually happen if there was $100,000 of damage or more to like 100,000 houses in that area. FEMA only pays less than $50k. And according to the studies they always talk about, most people don’t have $50k to fix their house. Would they just be homeless? The mold growth from all that water would make the houses unlivable.
Insurance fraud cuts both ways.
Yeah, that sounds about right. People think there’s a standard “full coverage” and then when something happens, suddenly the insurance company wants to make sure you understand the policy.
Taking those calls must be heartbreaking (though I’m sure the higher ups could care less).
Yea it’s full coverage the way heath insurance is full coverage, eyes, teeth and mental health are not included. It’s fucked up
Another thing to know about ahead of time is replacement cost coverage. I knew something that only had cash value coverage for their roof in addition to an $8000 deductible. They got a check from the insurance for about $200 and had to pay the rest out of pocket.
That is way too common. With how expensive everything is, people can’t afford to really protect themselves. Shit hits the fan and they have a crazy deductible and the most basic coverage because that’s probably still $100 a month. You find out that paying your premiums was no better than setting that money on fire every month.
