re: Why do so many not have flood insurance?

quote:

---

if you own a house in one of the heavy hit areas, and your home did not flood and did not ever really come in danger of flooding, does that force you to immediately get flood insurance? or does that just reaffirm that you do not need flood insurance? to me, if your home didn't flood during this unprecedented event, it would just reinforce the idea that one didn't need flood insurance

---

That was my thought. Except I am in flood zone AE about a mile away from clay cut bayou. The water ended up about 2' away from my house. So if we just saw a 500 year flood we would need to see an apocalyptic type flood for water to get in my house. So it would make sense to me that my neighborhood get moved to zone X. But I am sure that won't happen. Next year they will just double my premium.

I live in a no flood zone area but for $450 bucks a year it sounds like great protection

A buck quarter a day- that is less than a Starbucks

quote:

---

I literally piss $450.00 away on crap ... why not piss $450.00 on my largest asset instead?

---

I agree, but I'll play devil's advocate by making this observation:

If a house is in an alleged 500 year flood area as many of the flooded houses supposedly are, it would cost $225,000 to pay for the insurance premiums covering an event that is purported to occur once every 500 years and cost the average uninsured home owner $40,000 - $80,000 in repairs.

But making real-world decisions like whether people in SE LA should buy flood insurance probably shouldn't be based on an actuarial perspective because individual devastation is high on small percentage occurrences.

The best example I can give to demonstrate what I'm trying to say is an example I give to friends/family that argue that owning guns for self defense is statistically stupid because you're statistically more likely to accidentally shoot someone in your home than you are to purposely shoot a home invader. My response is that I doubt the unlucky people who are tied up, beaten and tortured, raped, forced to watch helplessly while their wives and children are tortured and murdered, I doubt they take consolation from the knowledge that - statistically speaking - it's better that they didn't own a gun because they would have been more likely to accidentally shoot somebody.

So all that is to say that my devil's advocate example of using an actuarial perspective to assess and make decisions about individual risk for real-world scenarios like this is foolish, but I believe the system in place for flood insurance passes this method on to individuals.

That's why I say there is an underlying issue with government and the flood insurance industry doing a piss poor job. IMO virtually every single one of the flooded houses should have had flood insurance, especially because they're geographically close to rivers that will flood during heavy enough rain events in a part of the country with heavy rainfall.

But they didn't because the average person doesn't put alot of thought into what would happen if 4 trillion gallons of water was dumped into the Comite and Amite over a couple days. They assume that smarter people who make their livings by studying this shite already have it figured out and have told them they're not in flood zones. In their minds, buying flood insurance would be as ridiculous as buying alien invasion insurance. And from an actuarial perspective, it probably is just as ridiculous when living in a 500 or 1000 year flood area. But from an individual perspective of "can I self-insure against this event?" IMO people can see the logic in buying flood insurance in south Louisiana regardless of what letter of the alphabet some spreadsheet creator put over the zone we live in.

quote:

---

The water ended up about 2' away from my house. So if we just saw a 500 year flood we would need to see an apocalyptic type flood for water to get in my house. So it would make sense to me that my neighborhood get moved to zone X. But I am sure that won't happen. Next year they will just double my premium.

---

That's not really how it works. Every flood is different. What is the water source, how much rain and where, speed of water, not to mention new development sometimes far from you that can affect how water drains.

If you want to self-insure the risk, that is fine, but your line of thinking is faulty.

The insurance people / realtors / everyone else needs to kill the 100/500/1000 year terms with fire, and kill them now. The wording is utterly bogus.

There is a .02 percent chance (two one-hundreths of a percent) that your house could flood. But, even those terms 1) may not be scientifically right as climate and land use patterns always evolve and 2) do not differentiate between an inch of water in your house and 9 feet of water in your house.

Also your thought of total premiums being 225K is not sound as you won't own your house for 500 years.

The NFIP needs serious reforms in order to make people aware of what is covered and expand coverage. I thought we would get that after Katrina, but instead we got very little, and what Congress did pass was a joke.

quote:

---

Once the policy is in place, you may be able to get it added to your escrow by calling your mortgage company.

---

I'll certainly look further into this. My mortgage is with SunTrust Bank. If this can't be done, not a big deal ... as long as I don't disregard the annual reminder that I am supposed to receive.

quote:

---

Why do so many not have flood insurance?

---

As with all things in life, it's a simple matter of risk/reward/probability.