CATHEDRAL CITY, CA - AUGUST 21, 2023: Nick Rodriguez stands on top of an outdoor barbecue area in his brother's backyard flooded by the remnants of Tropical Storm Hilary on August 21, 2023 in Cathedral City, California. The inside of the house has 18 inches of flood water. "The water came into the house around midnight full blast, Rick Figueroa said. He and his family were huddled in a bedroom until sunrise. Unable to escape through the front door, Figueroa's wife, Dawn, and her daughter Ella, escaped through a neighbor's back wall on Monday morning.(Gina Ferazzi/Los Angeles Times via Getty Images)
Editor's Note:This is an updated report of a story originally published on July 12, 2023.
new York CNN-
Tropical Storm Hilary made landfall in the western US this weekend, becoming the first tropical storm to cross California in a quarter of a century and the first tropical storm to hit Nevada. Several areas of Southern California broke rainfall records, with downtown Los Angeles experiencing the wettest summer day on record. Roads across the state are flooded with water, mud and debris.
But while the Golden State's roughly 39 million residents are used to wildfires and earthquakes, when it comes to flood insurance, there were only about 194,000 active policies in the state through July 31, according to data from the Federal Emergency Management Service.
The city of Palm Springs – with a population of around 45,000 – has seen almost an entire year's worth of rainfall in just 24 hours. Meanwhile, there are only 167 active flood insurance policies in Palm Springs, according to FEMA.
Life-threatening flash floods in areas that don't normally flood – as well as forecasts of more frequent extreme weather events – are deadly reminders of the importance of flood insurance.
But while policies can be vital to protecting many families' greatest assets, flood insurance is still misunderstood and often ignored. Here's what you need to know about it.
What is flood insurance?
flood insuranceIt is a type of policy that protects renters, homeowners, and business owners from flood damage.
These policies are generally not included in home insurance, but may cover damage to the integrity of the building itself and loss of interior belongings. Renters flood insurance only covers the contents of your home.
In the United States, FEMA traditionally provides all flood insurance plans through the National Flood Insurance Program (NFIP). This means that even a plan through a company like GEICO is supported by the federal government.
“Floods are the most common disaster across America,” said David Maurstad, senior executive of the National Flood Insurance Program. “Insured survivors are more resilient and recover faster after a disaster.
Is FEMA flood insurance sufficient?
Per FEMA policies, coverage for single-family homes is limited to $250,000 for damage to a building and $100,000 for its contents. For companies, the maximum coverage is $500,000 each.
If the flood damages your home beyond repair, that amount may not be enough to rebuild it. In this case, it may be important to consider private flood insurance options. In recent years, these providers have carved out a niche in the flood insurance market, offering more coverage and higher limits than federal plans.
Who can get flood insurance?
Virtually all homeowners in the US can obtain flood insurance from FEMA, butthose who live in higher-risk areasYou may need to purchase a plan.
For example, much of Miami is considered a special flood risk area. In these locations, flood insurance is mandatory for any homeowner with a federally secured mortgage. However, there are many people who live in flood zones or moderate risk areas who choose not to get flood insurance or choose to let their policy lapse.
According to the Insurance Information Institute, an industry trade group, Florida, Louisiana and Texas account for 40% of all flood insurance policies nationwide.
But it's not just coastal states that need to be vigilant.
“We tend to focus on the big hurricanes that make the headlines, but inland flooding is just as frequent as coastal flooding,” said Laura Lightbody, director of energy modernization and flood-ready communities at the Pew Charitable Trusts.
A car is partially submerged in floodwaters as Tropical Storm Hilary moves through the area on August 20, 2023 in Cathedral City, California. Southern California is under the first tropical storm watch as Hilary batters parts of California, Arizona and Nevada. All California state beaches were closed in San Diego and Orange counties in preparation for the impacts of the storm, which was downgraded from hurricane status.
“Since the beginning of 2022, the states of the interior represented six of the top 10 states that have experienced the most flood-related disasters,” she said.
Why is flood insurance not included in my home policy?
Home insurance typically covers wind, fire, and theft, but excludes floods and earthquakes.
"These last two were seen as risks that occurred so randomly and caused such extensive losses that, over time, the industry sold these policies separately," said Michael Barry, spokesman for the Insurance Information Institute.
The origin of this exclusion dates back to the National Flood Insurance Act of 1968, which established the NFIP. At the time, according to Barry, private insurers were unable to price policies that adequately reflected risk, so the federal government stepped in to subsidize them.
FEMA managed to underprice the policies compared to what private companies would charge.
How much does a policy cost?
Like other types of insurance, these premiums increase along with the perceived risk. For example, in Miami, flood insurance can sometimes rival what people pay for home insurance, according to the Insurance Information Institute. However, payouts for people with coverage can run into the tens of thousands of dollars.
In areas where flooding has generally been less likely, insurance may be cheaper. However, this does not mean that these regions are flood proof.
"According to the survey, more than 14 million properties are at risk of experiencing a (100-year flood), nearly double what FEMA designates as a 'Special Flood Risk Area,'" Lightbody said.
Should I get flood insurance?
According to FEMA, one inch of floodwater can cause damage of up to $25,000.
The agency maintains a database of searchable maps that designate certain communities as high or low risk. FEMA defines a high-risk area as one with at least a 1 in 4 chance of flooding at some point during a 30-year mortgage period.
But he also warns that flooding can happen anywhere and for a variety of reasons, including nearby construction and poor sewer maintenance.
According to Lightbody, the FEMA map “is not predictive. It's kind of a snapshot in time where they can model where there's risk.” She added that this risk could also have increased over the past decade due to climate change, population growth and new developments in cities and towns.
“The more buildings, structures and homes there are, the less green space to soak up floodwaters,” noted Lightbody. “If that water has nowhere to go, it will go to homes.”