Waking up on Sunday, Kyle Starks found floodwater reaching the door of his Jeep after another strong storm hit California. Rescuers arrived with boats to rescue Starks and other residents from his trailer park in the town of Acampo. Despite the physical destruction, the storm could have a financial impact: Starks does not have flood insurance.
In California, only about 230,000 homes and other buildings carry flood insurance policies, which are separate from homeowners insurance. That means only about 2% of properties are covered against flooding. The federal government is the insurer for most of them, approximately 191,000 as of December. Private insurers issued the rest, according to the most recent state data from 2021.
In California, 145,474,880 cubic meters (32 billion gallons) of rain and snow have fallen since Christmas. The water washed away roads, knocked out power and triggered landslides as it drenched hills charred by wildfires. It caused damage in 41 of the state’s 58 counties. At least 21 people have died.
A specific study is needed to know the role of climate change in certain types of weather, but warmer air means that the storms that have inundated California in recent weeks may bring more water with them. Despite this, the drought in the state has dulled people’s sense of risk in the face of potential flooding. People often buy insurance after disasters, when they act on an emotional reaction, said Amy Bach, executive director of insurance consumer group United Policyholders.
When a person buys a house, a key document is the official maps of the Federal Emergency Management Agency (FEMA), which indicate if it is in an area of high risk of flooding. If so, and you have a federally backed mortgage, you must purchase flood insurance that costs an average of $950 per year. Many banks also require it. However, FEMA’s maps are limited and only take into account certain types of flooding; they do not actually forecast the risk of their occurrence. For example, floods caused by heavy rains that clog storm drains are not taken into account. Those limitations mean that flood risk is underestimated nationally. The maps particularly downplay the chance of a disaster in California, according to Matthew Eby, executive director of the First Street Foundation, a risk analysis organization.
Despite the fact that few homeowners buy flood insurance, the storms damaged thousands of homes so badly that they will have to be repaired before people can move back in. But Nicholas Pinter, a professor at the University of California, Davis, who researches watersheds, said California needs to prepare for even more serious events, and that requires much greater investment in flood defenses and increased awareness of their danger.
FEMA has long said that its revised prices, and not the flood maps, communicate flood risk to consumers. The old system put more emphasis on simple metrics: a home’s elevation and whether it was located in a mapped flood zone. Risk Rating 2.0 takes into account distance to water, damage from heavy rain, and many other factors. Increases rates for approximately three-quarters of policyholders and offers first-time price reductions.
State officials said even without flood coverage, they try to help people file claims with insurers. For example, sometimes flooded cars are covered by auto insurance policies. Jay Laub, one of Reyes’s neighbors who was also rescued from the floods, said when he bought his home, insurance companies were largely trying to sell him earthquake coverage. He said that he assumed that his house was covered against flooding. This week he knew he wasn’t.
Despite the fact that few homeowners buy flood insurance, Trevor Burgess, chief executive of private insurer Neptune, said there has been a spike in new policies due to the storms. During the first 10 days of 2022, the company sold 53 in California. This year, Neptune sold 313, an increase of about 500%. “Storms, even when they are this terrible tragedy (human tragedy and property tragedy), have the effect of reminding people that they are vulnerable and need to protect themselves,” Burgess said.
It is important for people to be aware of the risk of flooding and the importance of having flood insurance. Without it, people can be left with unimaginable costs and damages that they are unable to pay for. It is important for people to be aware of the official maps of the Federal Emergency Management Agency (FEMA), which indicate if it is in an area of high risk of flooding. If so, and you have a federally backed mortgage, you must purchase flood insurance that costs an average of $950 per year. Many banks also require it.
It is also important to remember that FEMA’s maps are limited and only take into account certain types of flooding; they do not actually forecast the risk of their occurrence. For example, floods caused by heavy rains that clog storm drains are not taken into account. Those limitations mean that flood risk is underestimated nationally. The maps particularly downplay the chance of a disaster in California, according to Matthew Eby, executive director of the First Street Foundation, a risk analysis organization.
It is essential for people to be aware of the risk of flooding and the importance of having flood insurance. Without it, people can be left with unimaginable costs and damages that they are unable to pay for.
