In the wake of Harvey’s punishing blow to the Texas Coast, victims of this record-breaking storm have just begun to comprehend the impact winds and flood waters will have on their ability to recover and rebuild. With initial assessment of damages at $30+ billion, costs can only be described as catastrophic. FEMA is predicting they will reside in Houston for years with the real scope and magnitude of Harvey continuing to unfold with each passing day.
As residents sort through the devastation of Harvey, the unfortunate reality is that less than a third of Harvey’s losses are insured according to Chuck Watson, a disaster modeler with Enki Research. For example, less than one-sixth of homes in Harris County had actual “flood” coverage, leaving many individuals in potentially dire financial straits.
What most homeowners should know is that flood damage is rarely covered under their basic homeowners policy. It is, however, available under a separate insurance program backed by the federal government known as the National Flood Insurance Program (NFIP). This policy provides specific protection against damage caused by rising water from an outside source, whereas most basic homeowners policies usually only cover water damage from within the home. Despite this provision, many homeowners, realizing that their mortgage company did not require flood coverage, ultimately chose to save that premium expense believing the protection was unnecessary. While the homeowners’ losses will continue to be a challenge for carriers and NFIP to unravel, the automobile losses should fare better as most coverage includes comprehensive protection regardless of the source.continue reading »