Your Flood Risk May Be Greater than You Think

Your Flood Risk May Be Greater than You Think

July 08, 2017

Your home may be at greater risk of flooding than you think. Storms are not the only cause of floods. And global warming increases flood risks from storms because:

-- Flood zones change more rapidly than flood zone maps and global warming may cause flood zones to change even more rapidly in the future.
-- Global warming increases precipitation, making floods more likely, even in areas not shown on flood zone maps.

Yet, you probably don’t have flood insurance.
Very few American do. According to the Wall Street Journal, only 15% of homeowners in Houston had purchased flood insurance. An Associated Press article stated that “Florida has roughly 2.5 million homes in hazard zones... just 42 percent of these homes are covered” by flood insurance. “Nationwide, only half the 10 million properties that need flood insurance have it.”

Unless you purchased flood insurance as additional coverage on your homeowner’s policy, you don’t have the coverage. The WSJ article states, “Standard homeowners’ policies do pay for some damage from water—such as if it enters the house after the wind rips off the roof or a tree crashes through the attic. But if water overflows a riverbank or gushes down a street to seep into a house, the homeowner can expect a claim to be rejected...”

More than 20% of flood claims come from properties outside flood zones. One reason is that floods don’t just result from storms. The National Flood Insurance Program definition of floods includes “Unusual and rapid accumulation or runoff of surface waters from any source.” I highlighted “from any source” because FEMA’s flood definition includes

  • Broken water mains, fire hydrants or dams
  • Sewer backups (from outside the home),
  • New developments changing how water flows and
  • Snowmelt.

In Houston, “many homes were flooded even though they were located far from the designated floodplains.” And flood maps may not help. “FEMA maps are updated infrequently because Congress has not appropriated enough money for the work. The maps do not take into account the future impact of climate change or the impact of likely real estate development in the area…FEMA has not created flood maps for the entire country, leaving some home buyers unaware of flooding risks.“ New York Times

Homes on properties located in 100-year flood zones (1% annual risk of flooding) are required to purchase flood insurance to obtain a federally backed mortgage. Flood insurance is not required. For homes not in one of those zones or not financed with a federally backed mortgage,

A couple I know in Iowa did not live in a flood zone when their entire neighborhood flooded. Their house and many others had to be torn down because of mold and other damages. Only one person in their neighborhood had flood insurance. That area is now listed as being in a flood zone. Too late for that couple and their neighbors.

So don’t just look at flood maps, look out the window. Is your home near a body of water? What is the home’s elevation? Has there ever been a flood or hurricane anywhere near your home? Is your county spending the funds necessary to maintain water mains and sewer systems? Have new developments been built near your home?

Look at your finances. Could you afford to pay to fix or replace your home and personal possessions? No one likes to pay for insurance. But if you cannot afford the loss, you need the insurance.

I recommend that you call your homeowners insurance agent to discuss these issues.

Other information: For an article on making sure you home is fully insured, click here. Information from FEMA is here. A good explanation of the term “100-year flood zone” is here.


This is for educational purposes only. It is not a recommendation. Arthur Stein Financial, LLC. (ASF) does not offer or provide advice property/casualty insurance (home and auto), taxes or legal issues. ASF is not a Home and Auto Insurance agent.To learn more about the topics mentioned and if they are suitable for you, consult an appropriate professional, sucha s an insurance broker. Tax laws can change at any time.

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