Disaster Preparedness & Recovery

Flood Insurance: A Roll of the Dice

Much of California's San Joaquin County are prone to flooding at the bottom of this Central Valley bathtub. Then again, it’s been close to 70 years since the area saw extensive flooding.

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(TNS) - You’ve seen the headlines, and you’ve heard the hype.

Now you’ll have to decide: Does the arrival of El Niño call for buying flood insurance?

“Yes,” thousands of Californians have concluded. The Federal Emergency Management Agency, which administers the nation’s public flood insurance program, says more than 28,000 new policies were purchased from September through November, a 12 percent increase that is unmatched in recent history.

Stockton and much of San Joaquin County are prone to flooding at the bottom of this Central Valley bathtub. And this year, some Calaveras County residents may be vulnerable to mudslides from the Butte Fire burn scars.

Then again, it’s been close to 70 years since urban Stockton saw extensive flooding. And flood insurance is yet another expense in a community struggling with poverty.

In the end, experts say, you’ll have to decide for yourself if you want to roll the dice.

“It’s a question of peace of mind, and what risk are you willing to take,” said Jim Giottonini, head of the San Joaquin Area Flood Control Agency.

Don’t wait too long if you want to beat El Niño storms, however; once you sign the policy, it’s usually 30 days before it takes effect.

Question: Aren’t I already covered?

Answer: Standard homeowner’s insurance doesn’t cover floods. If a flood happens and you’re uninsured, you’ll have to hope that the president will declare a disaster, which could make you eligible for loans that must be paid back with interest, FEMA says.

Just 9 percent of homeowners in the West have flood insurance, according to the Insurance Information Institute. Average claims total about $42,000.

“Now is the moment,” said Janet Ruiz, a spokeswoman for the institute, which is funded by insurance companies. “There is still a chance for people to take action. When it’s flooding, it’s too late.”

Q: How much will flood insurance cost?

A: Most of Stockton is considered low- to moderate-risk, which means residents should be eligible for the “preferred rate policy” — the lowest rate offered. The cost will vary based on the value of your property, but expect to pay between $300 and $450 a year for building and contents (you can buy a maximum $250,000 and $100,000 in coverage, respectively). Renters can choose to buy coverage for contents only.

The neighborhood around the Smith Canal area is different. Flood insurance is mandatory there for many homeowners, and they’re paying thousands of dollars a year for it, with costs continuing to rise.

It is possible FEMA could designate more areas of Stockton as high-risk, including the Twin Creeks neighborhood on the northwest side of the city. If that happens, buying insurance now could get you grandfathered in at a lower rate. But FEMA has so far taken no action.

Q: What will flood insurance cover?

A: The building itself, along with electrical and plumbing systems, air conditioners, built-in appliances and detached garages. Contents coverage takes care of things like clothes, furniture, electronics and valuables like original artwork (though only up to $2,500).

Not covered: Cars, currency, outside features like patios or hot tubs, and temporary living expenses. Coverage is also limited for items in basements.

Q: Any fine print?

A: Tons of it. Consider the definition of a “flood.” For insurance purposes, it’s the “overflow of inland or tidal waters” to the extent that the waters partially or completely inundate at least two properties or an area at least two acres in size.

So if your roof blows off during a storm, and your house fills up with rainwater, that’s not considered a flood because it didn’t flow over land to get there. (Though your homeowner’s insurance would likely take care of that problem.)

Calaveras residents should pay special heed, as well, to the definition of “mudflow” — “a river of liquid and flowing mud on the surfaces of normally dry lands.” Ordinary landslides are not considered mudflows, nor are rain-saturated soils that slide down a hill.

All of this illustrates why it’s so important to talk to an insurance agent about specifics.

Q: What’s the real risk of a flood?

A: There’s always risk if you live behind a levee, but local officials say they’re ready for what may be coming later this winter and spring.

Chris Neudeck, a Stockton engineer who works on the levees, said he’s concerned that FEMA is pushing new insurance policies hard because it’s attempting to dig out from billions of dollars in debt that the agency incurred paying off claims in the wake of hurricanes Katrina and Sandy.

FEMA has been particularly aggressive of late in its marketing of flood insurance. “Don’t gamble any longer,” reads one brochure. “If there ever was a year to buy flood insurance, this is it,” reads another.

Whatever the motivation for FEMA’s push, that doesn’t change the fact that some homeowners may indeed benefit from flood insurance, Neudeck said.

“Being in the profession, I would look very foolish if I didn’t endorse flood insurance,” he said. “We have fire insurance, liability insurance, car insurance, all that stuff we spend tens of thousands of dollars on, never anticipating something is going to happen. A flood does have a chance of occurring.”

That’s true even outside of the highest-risk flood zones. FEMA says about 25 percent of its claims go to policyholders who are in lower-risk areas, as is most of Stockton.

The city hasn’t seen a truly catastrophic flood since the 1950s, and the levees have been substantially improved since then. Still, a flood doesn’t have to be the result of massive levee failures. Maybe there’s a severe afternoon thunderstorm and the storm drains on your street are overwhelmed. Maybe only a single city block is affected. Maybe only a few inches of water splash into your house.

The damage could still be in the thousands of dollars.

Q: But how can I tell how deep the water would be at my house?

A: There’s no way to know for sure. It depends on the cause of the flood and the elevation of your property. But here are a couple of ways to get a rough idea:

• The county Office of Emergency Services has published user-friendly evacuation maps that give an idea of the flood depth in any given neighborhood. Visit sjmap.org/evacmaps, scroll down and click on the brochures.

• A FEMA tool allows you to punch in your address and learn more about your risk, the likely cost of a policy, and the names of nearby insurance agents. Visit floodsmart.gov and look for the red box.

Stockton agent Kristyn Wilson said she’s noticed more people inquiring about flood insurance lately. Some sign up. Others choose not to. One way or the other, at least they looked into it and gave it some thought.

“Insurance is a risk,” Wilson said. “You either buy into that risk and gamble that it may not happen, or you don’t. And then when it doesn’t happen, you kick and scream.”

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