California suffered severe storm damage but only 2% of properties were covered by flood insurance

On Sunday morning, Kyle Starks awoke to floodwaters arriving at the door of his Jeep after yet another heavy rain drenched California. Emergency crews showed up with boats to float Starks and other residents of his rural mobile home park in Acampo to safety.

Beyond the physical destruction, the storm could bring a financial hit: The Starks don’t have flood insurance.

“I didn’t think it would flood this badly,” he explained from an evacuation center, worried that the water could damage wiring and air conditioning equipment.

In California, only about 230,000 homes and other buildings have flood insurance policies, which are separate from homeowner’s insurance. That means only about 2% of properties are covered against flooding. The federal government is the insurer for most of them – about 191,000 in December. Private insurers are issuing the rest, according to the latest state data from 2021.

In California, 32 trillion gallons of rain and snow fell since Christmas. Water washed away roads, knocked out power and created mudslides by soaking the fire-scorched hills. It caused damage in 41 of the state’s 58 counties. At least 21 people died.

It will take a focused study to determine the role of climate change in specific weather, but warmer air means more storms like the ones that have hit California in recent weeks. can carry more water.

But in California drought weakened people’s sense of the risk of flooding. People often buy insurance after disasters when the risk is visceral, said Amy Bach, the executive director of the insurance consumers group United Policyholders.

“People think that the only people who need flood insurance are people who live right on the coast or along a river that has a history of flooding,” Bach said. In fact, more people are threatened by rushing or rising water.

When you buy a home, an important document is the official Federal Emergency Management Agency maps that will tell you if it is in a flood risk area. If it is and you have a federally-backed mortgage, you must purchase flood insurance that costs an average of $950 a year. Many banks require this as well.

However, FEMA maps are limited and only consider certain types of flooding – they do not actually predict flood risk. Flooding caused by heavy rains backing up storm drains is not counted, for example. The limits mean that flood risk is underestimated in the country. The maps specifically underestimate the chance of disaster in California, according to Matthew Eby, executive director of the First Street Foundation, a risk analysis organization.

FEMA maps do not show Stark’s mobile home in a hazard zone. And three years before his neighbor Juan Reyes bought his house, a series of typhoons dumped a lot of rain in the state and flooded their neighborhood.

Reyes knew this, but he still did not buy flood insurance. It was too expensive, he said, and unnecessary. In addition, he believes that local officials have improved the storm drainage system so that similar floods do not happen again. But it was done and Reyes also had to be rescued by boat. He stayed in the same evacuation center, hoping his home would not be too badly damaged.

The storms destroyed several thousand homes so badly that they had to be repaired before people could live in them again. But Nicholas Pinter, a professor at the University of California, Davis who researches watersheds, said California needs to be prepared for bigger events and it needs more investment in flood defenses and more aware of its dangers.

“It’s worrying that there will be so much damage as what is severe but not catastrophic flooding,” he said.

State officials say that even without flood coverage, they try to help people pursue claims — flooded cars, for example, are sometimes covered under policies car insurance.

Also trying to figure out how to recover is David Enero of Merced, a community of nearly 90,000 in California’s Central Valley that has been severely flooded. The water rose up to the foot of his house. The laminate floor in his living room is floating.

“It’s like you’re walking on a wave or a trampoline” he said. The house smelled like a mixture of mold, rotting hay and an overflowing septic system.

January lives in a high-risk area where people should buy flood insurance. He said that paying for the damage himself was unimaginable. In retrospect, he wished he had insured his belongings as well.

Although the maps forced Enero and others in some areas to buy coverage, FEMA no longer uses its famous maps to set prices.

The agency updated its price in 2021 to more accurately reflect the risk and it is called Risk Rating 2.0. FEMA says it’s these updated rates — and not flood maps — that communicate flood risk to consumers. The old system placed more weight on simple metrics – the height of a house and whether it was on a flood map. Risk Rating 2.0 takes into account distance to water, damage caused by heavy rain and many other factors. It raised prices for about three-quarters of policyholders and offered price reductions for the first time.

FEMA has long said the new ratings will attract new policyholders with rates that reveal a property’s true risk, and are more accurate. However, they have since begun to have an effect in California, the number of policies fell by nearly 5%, continuing a year-long decline nationwide.

Some are unaware of their risk.

Jay Laub, one of Reyes’ neighbors, who also survived the flood, said that when he bought his house the insurance companies usually tried to sell him earthquake coverage. He said that his house was covered by the flood. He found out this week that it wasn’t.

Laub said he was concerned that his mobile home might have sunk into wet ground, which might require him to relevel it. He said he wasn’t sure how he was going to pay for it.

“What are you doing? You’re on social security, like me,” she said. “But you know what? You’re taking it one step at a time. You just have to stay strong.”

Trevor Burgess, CEO of private insurer Neptune, said there was a rush of new hurricane policies. In the first 10 days of 2022, the company sold 53 in California. This year, Neptune sold 313 – almost a 500% increase.

“Hurricanes, even though they’re terrible tragedies — human tragedies and property tragedies — they have the effect of reminding people that they’re vulnerable and need to protect themselves,” Burgess said.

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