This is just a question...

What do people who don't have flood insurance do?

I was helping someone clean up their flooded home and he said he had no flood insurance and from what he understands, FEMA only gives low intereat loans to help.

If you have a house payment, how do take an additional loan to fix the house you can't live in?

What are the options for those whose houses were totally flooded and dont have flood insurance?

Unfortunately, the options are limited. FEMA loans are low interest rate, but they are loans. The best chance is to talk to charitable organizations. Many churches have teams that help rebuild home.

Talking with my uncle in Baton Rouge, he said many people just walked away from their houses. I ran the numbers on my situation and, without considering the financial impact of the credit hit, it pencils out heavily in favor of walking away.

Weighing that against the moral obligation of me borrowing money from someone and promising to pay them back...it's going to be a tough decision. And I'll add that everyone's decision will be unique. Good luck.

After Katrina, a lot of people walked away. The difference, from my understanding, is that a majority of homes in LA were generational homes, and we're owned out right. Houston is a different story. The majority of homes were mortgaged, so walking away is considerably more expensive and burdensome than it was for most after Katrina.

IDaggie06 said:

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I don't have flood insurance but got VERY lucky the water stopped a street or two behind me from the Buffalo Bayou releases Wednesday/Thursday. Pretty sure I live somewhat near you TulaneAg.

Never again will I go without flood insurance. The stress I incurred during Harvey (even though I have been out of town for 2 weeks) was not worth it. A house flooding with flood insurance would be hard enough to deal with.

I personally think the problem with the current way flood insurance is done and the reason many don't have it (besides though unwilling to pay for it) is the fact home insurance can't offer it and it has to be a separate policy. I'm still not exactly sure how to go about getting flood insurance but everyone is telling me it is less than $500 a year so I am going to figure it out asap. My place has never flooded to my knowledge but still not worth that stress.

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Call your agent and they can get you all you need to sign up.

a lot of people are just not educated enough about it or rely on the flood maps. if they reside outside flood plains they think they are ok. unfortunately it can take events like this to change people's perception.

Out of flood plain, don't have insurance but will be buying it.

There is also a remapping on a large scale of floodplain maps for our region underway. It'll take a few years for all the FEMA floodplain maps to be updated but I'd expect some big changes after the Tax Day and Harvey floods.

jt16 said:

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This is mind boggling that so many don't have flood insurance. $450/annually for flood insurance for most people. We need to be more proactive in getting people to insure what typically is their largest investment.

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jt, there's been quite a change in that type of insurance for the last 20 years. I don't know what kind of balance FEMA has now, but it's likely sitll billions in debt. Yes, I know, it's the government, it's all in debt.

I bring this up because the house my folks have had since '65 was suddently included in the FEMA map in '98. I'd refinanced the house for them on a cash out (my Dad had cancer, and needed extra funds). The mortgage company decided they needed flood insurance, but it was only $330.00/year. Dad ('54) passed in 1/23/00, and my Mom is now 82. The flood insurance is now $1,866.00/year. The house and the lot have never flooded, but the fees still go up.

I have no problem with them attempting to pay their way, since it would be nice if all government departments could do so. However, it's now getting into the area of homeowners insurance.

The point I'm trying to make is that the yearly fee appears to vary greatly from certain parts of the country, and certainly depends on what zone you're classified. I had an elevation survey, but got no fiscal relief.

Now, if I had a house that wasn't in the flood zone, of any kind, it's likely I wouldn't pay it, either. IF it was indeed $450.00/year, then I might consider it, as I know the ramifications. But, it doesn't always meet that fiscal amount. Just and FYI.

I need to make an appendage to this. Since it's not going to flood in other times of the year, I might buy flood insurance from June 1st to October 31st----hurricane season.

The comparison to Katrina is incorrect on a location level, but not necessarily on a demographic level. There are many, many homes in the Houston area that do not have mortgages and as such many low income and / or elderly folks let not only the flood insurance lapses but also their windstorm insurance. The HUD programs will focus first on these impacted residents but with the amount of money being discussed there should be assistance in the form of grants / forgivable notes to cover losses in instances where people did not have flood insurance.

While flood insurance is available to anyone, I imagine both insurance companies and certainly homeowners will make an argument that this was such an extreme occurrence that those outside the 100 year flood plain who were a) not required by mortgage to carry flood insurance; and b) chose not to carry should be eligible for recovery funding.

The next 60-90 days will be the determination of the initial assistance and the first set of "rules" or eligibility for the assistance.

If your damage is catastrophic and not covered by insurance, I would encourage participating in the shelter in place programs then waiting to see how the longer term recovery assistance plays out.

My insurance company (USAA) offers the service and you pay them directly. I guess they pay the government. I've had flood insurance for over 20 years (even on my contents when I lived in an apartment in Houston after I graduated). The stress is just not worth it. I pay only $200 for $50k in coverage/$20k contents. But I am not in a flood plain.

Flown, I've always received a yearly quote. It's not a monthly bill and the entire bill is due at purchase.

I think most people don't even know it's an option or that they should get it if they don't live in an area where the mortgage company requires it. And I don't think the average insurance agent knows enough to encourage people to get it. My family had 4 ft of water in Katrina. No flood insurance because it wasn't a "required" zone. After Katrina, they almost immediately went to their insurance agent and asked to buy a policy. The agent's response: "Are you sure? You don't live in a flood zone."

I have a friend who is in a similar situation. Home took on water - they have no flood insurance. They didn't realize their policy lapsed while their father was in the hospital in dire situation in June. Besides FEMA grant/loan and SBA Loans what other options might be out there that they can apply for assistance?

Thanks everyone

We've never had flood insurance and frankly, it made everything that much more stressful here in Sugar Land.

We didn't flood but had the pumps in our levee district failed, or not been able to keep up with rainfall, we would've been in a horrible situation.

I've already started the process of spending $450/yr to have that piece of mind!

Never again will I live in Houston and not have it!!

aggieswmr04 said:

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I have a friend who is in a similar situation. Home took on water - they have no flood insurance. They didn't realize their policy lapsed while their father was in the hospital in dire situation in June. Besides FEMA grant/loan and SBA Loans what other options might be out there that they can apply for assistance?

Thanks everyone

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I heard today that FEMA is going to honor flood policies that lapsed. Maybe check into that?

Flood insurance is very easy to obtain. Just call your agent and say you'd like to buy it. In my case, Liere processed the credit card payment over the phone. It was the same deal for USAA and Liberty Mutual that I've also used in the past.

If you can't afford the flood insurance, you can't afford the home in my opinion.

I currently live on the edge of a 500 year flood plain. I'm actually just outside of it. We didn't flood. I pay $450/year for the max insurance available to me which is 250k dwelling / 100k personal property.

Everywhere I've lived, I bought it. From a coastal inundation zone to mountain side. The property on a mountain side could possibly get mudslides which I was told are considered a flood so I bought it just to be safe.

RedassAg04 said:

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Just curious, if everyone who didn't have insurance gets bailed out by the government (by which I mean grants, not low cost SBA loans) what message does that send to the people that have been paying for flood insurance for 20+ years at a high cost?

The moral hazard of this was a topic of much discussion in New Orleans after Katrina.

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It should send the message that if you pay for flood insurance, your damages will be covered. If you don't, then you are going to be spending a LOT of money. No one will get the same amount from FEMA that they would from a flood insurance policy. Even if FEMA gives grants, they won't come close to covering the true cost of the damage. No one will be getting "bailed out" by FEMA, they might get a small amount to offset the horrific cost to keep and restore their homes but they will bear most of the cost themselves. I wish more people really understood this.

I understand exactly what you're saying though; there are too many people who believe that if you don't have flood insurance FEMA will take care of you, both folks who don't think you are entitled to anything if you don't have flood insurance and those who choose not to buy it/not even worry about it even in a city that floods every year. It's a very dangerous fallacy.

It is like the others have mentioned on here. Just call either your agent or any agent for that matter.

The pricing is going to be the same from all of us.

If you are in the safest flood zone area your max will be the 450 plus I think a 25 administration fee for the 250 k and 100k coverages.

If your home is rated in a higher risk then yes, your rates will be higher. I wish they would make every home have it in a way, but then I don't truse our politicians to keep their hands off that money that would be there to pay out.

For those who flooded from buffalo bayou due to the reservoir releases, i saw this posted yesterday and may be a solid option for recourse, especially those without flood insurance.

http://www.raiznerlaw.com/inverse-condemnation-rights/?_vsrefdom=ppc007&src=google-%2Baddicks+%2Breservoir+%2Brelease&gclid=CNKDmv3lidYCFd21wAodI0QA8w

Quote:

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An inverse condemnation can occur when the government takes private property for a public use without any formal process or condemnation proceeding. A Texas property owner must demonstrate the government's intentional actions resulted in property being taken, damaged, or destroyed for a public use.

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Quote:

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In most circumstances, the government makes a determination that it needs to take land for a public purpose, such as building a highway, laying train tracks, or installing utility lines, and then initiates proceedings to take the land and compensate the owner. An inverse condemnation action arises when the process works backward. In these circumstances, the government takes the land first, and the property owner is forced to file a lawsuit in order to secure their rightful compensation.

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RedassAg04 said:

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Just curious, if everyone who didn't have insurance gets bailed out by the government (by which I mean grants, not low cost SBA loans) what message does that send to the people that have been paying for flood insurance for 20+ years at a high cost?

The moral hazard of this was a topic of much discussion in New Orleans after Katrina.

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I was kind of thinking the same thing. I didn't realize the FEMA money were loans. I imagine a lot of people are thinking, "I didn't flood this time. I don't have insurance. So why get it if I know FEMA $$$ will be available?"

We've had our house 9 years, and never had flood insurance. We didn't flood this time, and looking back, didn't come that close to flooding. It would take another Harvey +1, meaning practically the whole metro area would be under water. That said, for $450/year, I'll add it.

Frankly, as far as water damage is concerned, more people should probably examine their policies to make sure they are covered for the "slow leak" issues that can lead to expensive damage.

jenn96 said:

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RedassAg04 said:

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Just curious, if everyone who didn't have insurance gets bailed out by the government (by which I mean grants, not low cost SBA loans) what message does that send to the people that have been paying for flood insurance for 20+ years at a high cost?

The moral hazard of this was a topic of much discussion in New Orleans after Katrina.

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It should send the message that if you pay for flood insurance, your damages will be covered. If you don't, then you are going to be spending a LOT of money. No one will get the same amount from FEMA that they would from a flood insurance policy. Even if FEMA gives grants, they won't come close to covering the true cost of the damage. No one will be getting "bailed out" by FEMA, they might get a small amount to offset the horrific cost to keep and restore their homes but they will bear most of the cost themselves. I wish more people really understood this.

I understand exactly what you're saying though; there are too many people who believe that if you don't have flood insurance FEMA will take care of you, both folks who don't think you are entitled to anything if you don't have flood insurance and those who choose not to buy it/not even worry about it even in a city that floods every year. It's a very dangerous fallacy.

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For previous disasters like Sandy and Katrina, are there any stats on FEMA loan repayments? I imagine the default rate is fairly high in some areas. Have people actually lost their homes due to nonpayment?

NoahAg said:

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jenn96 said:

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RedassAg04 said:

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Just curious, if everyone who didn't have insurance gets bailed out by the government (by which I mean grants, not low cost SBA loans) what message does that send to the people that have been paying for flood insurance for 20+ years at a high cost?

The moral hazard of this was a topic of much discussion in New Orleans after Katrina.

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It should send the message that if you pay for flood insurance, your damages will be covered. If you don't, then you are going to be spending a LOT of money. No one will get the same amount from FEMA that they would from a flood insurance policy. Even if FEMA gives grants, they won't come close to covering the true cost of the damage. No one will be getting "bailed out" by FEMA, they might get a small amount to offset the horrific cost to keep and restore their homes but they will bear most of the cost themselves. I wish more people really understood this.

I understand exactly what you're saying though; there are too many people who believe that if you don't have flood insurance FEMA will take care of you, both folks who don't think you are entitled to anything if you don't have flood insurance and those who choose not to buy it/not even worry about it even in a city that floods every year. It's a very dangerous fallacy.

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For previous disasters like Sandy and Katrina, are there any stats on FEMA loan repayments? I imagine the default rate is fairly high in some areas. Have people actually lost their homes due to nonpayment?

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I know for a fact that a lot of the $ distributed in Mississippi after Katrina to families who flooded in areas that did not require flood insurance was given as grants that did not have to be repayed.

I'm reading that the NFIP is $25 billion in debt from Katrina and Sandy. Their borrowing limit is $30 billion.

For anyone else that might be in a similar situation as our friend whose policy lapsed. This information may be helpful. I think theirs falls outside of the period, but thought it might be helpful for others.

https://www.fema.gov/faq-details/Expired-Flood-Policy-Grace-Period

As far as the difference between those that have it and those that don't. I believe the grants only cover up to $33,000 and if you qualify for that amount. The rest are loans, but there is a qualification process there I think to figure out your rate. I don't know all the details yet, as I'm helping them figure all of this out.

Those that have coverage will be reimbursed through their policy based on qualification through the policy.

At the end of the day, it's best to have the coverage - like everyone has said it's super cheap. Having lived through Allison and seeing neighbors that didn't have the coverage and my parents did, even when they thought they'd never have to use it, I vowed to never live without it.

74OA said:

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TXTransplant said:

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NoahAg said:

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jenn96 said:

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RedassAg04 said:

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Just curious, if everyone who didn't have insurance gets bailed out by the government (by which I mean grants, not low cost SBA loans) what message does that send to the people that have been paying for flood insurance for 20+ years at a high cost?

The moral hazard of this was a topic of much discussion in New Orleans after Katrina.

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It should send the message that if you pay for flood insurance, your damages will be covered. If you don't, then you are going to be spending a LOT of money. No one will get the same amount from FEMA that they would from a flood insurance policy. Even if FEMA gives grants, they won't come close to covering the true cost of the damage. No one will be getting "bailed out" by FEMA, they might get a small amount to offset the horrific cost to keep and restore their homes but they will bear most of the cost themselves. I wish more people really understood this.

I understand exactly what you're saying though; there are too many people who believe that if you don't have flood insurance FEMA will take care of you, both folks who don't think you are entitled to anything if you don't have flood insurance and those who choose not to buy it/not even worry about it even in a city that floods every year. It's a very dangerous fallacy.

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For previous disasters like Sandy and Katrina, are there any stats on FEMA loan repayments? I imagine the default rate is fairly high in some areas. Have people actually lost their homes due to nonpayment?

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I know for a fact that a lot of the $ distributed in Mississippi to families who flooded in areas that did not require flood insurance during Katrina was given as grants that did not have to be repayed.

I'm reading that the NFIP is $25 billion in debt from Katrina and Sandy. Their borrowing limit is $30 billion.

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.........that's because NFIP doesn't charge policy-holders the rate necessary to cover the impact of floods. Instead, the policies are taxpayer subsidized to make them more affordable (i.e. cheap), which just encourages people to keep building (and rebuilding) in known flood zones. 2% of policy holders account for 40% of NFIP claims, and many of those are repeat claims........We Can Do Better

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Yep, that's a big part of the problem. They also didn't even deduct the $450 premium from the grants they gave out after Katrina. Seems like that would have been a no-brainer.

I'm reading a one-year post Katrina report put out by the state of MS. FEMA paid out $2.4 billion in NFIP funds to 16,939 policy holders. That's an average of $141,700 per claim. I read somewhere else that the average payout for claims from the Baton Rouge flood last year was $88k (I think that was for NFIP claims, but it wasn't explicitly stated).

Mississippi got $3 billion for the Individual and Household grant program and distributed it among about 31,000 homeowners (about $97k per grant). Looks like of those 31k, 19k did not have flood insurance because they were outside the 100 year plain. An additional 7800 did have flood insurance but the coverage was insufficient to cover the damages (I'm assuming these were people whose homes here completely washed away). The maximum anyone could receive in a grant was $150k, and they covered structures only (no contents). To get the grant, homeowners had to agree to a covenant establishing building codes, flood insurance, and elevation requirements for them or any future owner. The amounts people received were determined using a formula that included the pre-Katrina insured value of the home and the percent the home was damaged. If the home was completely destroyed, homeowners received the insured value (or $150k, if the insured value was more than that).

Separate grants of up to $30k were also given to help offset the cost to homeowners who had to elevate their homes in order to rebuild.

reading it, if you go that course to me it would seem then the government would own your land/house. would help you get out from under possibly with the cash buyout, but with hearing about eminent domain in the past and people talking about getting screwed would think this might be the same case

Im not a lawyer though and im sure that actual lawyers are looking at getting their teeth into it and argue the other way.

fasthorses05 said:

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jt16 said:

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This is mind boggling that so many don't have flood insurance. $450/annually for flood insurance for most people. We need to be more proactive in getting people to insure what typically is their largest investment.

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jt, there's been quite a change in that type of insurance for the last 20 years. I don't know what kind of balance FEMA has now, but it's likely sitll billions in debt. Yes, I know, it's the government, it's all in debt.

I bring this up because the house my folks have had since '65 was suddently included in the FEMA map in '98. I'd refinanced the house for them on a cash out (my Dad had cancer, and needed extra funds). The mortgage company decided they needed flood insurance, but it was only $330.00/year. Dad ('54) passed in 1/23/00, and my Mom is now 82. The flood insurance is now $1,866.00/year. The house and the lot have never flooded, but the fees still go up.

I have no problem with them attempting to pay their way, since it would be nice if all government departments could do so. However, it's now getting into the area of homeowners insurance.

The point I'm trying to make is that the yearly fee appears to vary greatly from certain parts of the country, and certainly depends on what zone you're classified. I had an elevation survey, but got no fiscal relief.

Now, if I had a house that wasn't in the flood zone, of any kind, it's likely I wouldn't pay it, either. IF it was indeed $450.00/year, then I might consider it, as I know the ramifications. But, it doesn't always meet that fiscal amount. Just and FYI.

I need to make an appendage to this. Since it's not going to flood in other times of the year, I might buy flood insurance from June 1st to October 31st----hurricane season.

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Based on the quote for your dad's insurance, I am guessing that he is in the 100-year flood plain. In those cases, it is normally required by your mortgage to purchase it, and it is more than $450/yr. Our house used to be in the 100-year flood plain, but it was removed from it when they redid the maps. Previous to that, our flood insurance was around what your dad pays. Now, it is $450/yr.

I know people don't read paperwork but aren't you required to sign something acknowledging you aren't purchasing flood insurance when getting a homeowners policy?

Also, if you maintain an active flood policy, aren't you grandfathered into your lower rate even if a redraw moves you into a floodplain?

LostInLA07 said:

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Also, if you maintain an active flood policy, aren't you grandfathered into your lower rate even if a redraw moves you into a floodplain?

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I can't speak to your first question, but the answer to this one is NO. At my old JV house our house was moved in and out of a flood zone. The rates certainly changed. It seems like my agent might have told me that it could have been worse, but it certainly went up drastically... like from $450 to around $2k.

$380/yr. is what I paid last week. We're we'll outside the 500 yr.

Came home to debris line only midway up our yard. Which was considerably lower than the Memorial Day flood that was >3/4 up our yard - about 5' from our house.

But it's not unthinkable to imagine Harvey with a little more wind producing more debris to block inlets and it could have been worse.