Real Estate Marketing & Beyond
Homeowners hit by Hurricane Ida now face a new challenge navigating the world of insurance claims, and there’s going to be bad news in store for some.
Many thousands of homes were damaged as a result of flooding. But most standard home insurance polices don’t provide flood insurance, which is usually sold as a separate, specific policy.
Tom Larsen, an insurance analyst with CoreLogic, told MarketWatch he estimates around 40% to 50% of flood damages that resulted from Hurricane Ida are covered by insurance. However the rest is not. Larsen said however, that far fewer people were covered by flood insurance during previous disasters such as hurricanes Harvey and Katrina.
Hurricane Ida battered the country, moving up the Notheast causing storms and flooding in its wake. In New York’s Central Park, more than three inches of rain fell per hour, causing flooding in the city. Hurricane Ida had first made landfall on the southeastern coast of Louisiana as a Category 4 storm on August 29, rating as the fifth-strongest storm to ever hit the U.S. mainland.
CoreLogic estimated the likely damage for residential and commercial properties at $27 billion to $40 billion, in both insured and uninsured losses. More than 90% of the losses occurred in Louisiana, which saw thousands of homes and businesses destroyed. Almost one million homes were left without power in the wake of the storm.
“Too many people and too many areas are still unprotected and saw a storm surge and flooding that was devastating,” President Biden said in a press conference on Thursday.
One of the reasons that so much of the damage is uninsured is that, according to a 2020 Policygenius survey, around 53% of homeowners mistakenly believe their standard home insurance plan covers flood damage.
Homeowners with a federally-backed mortgage are required to purchase flood insurance if they live in an area that’s designated as being at-risk of flooding. But renters and homeowners without a federally-backed mortgage are not required to purchase such a policy. The average cost of flood insurance is around $700 per year through the National Flood Insurance Program.
