Released: July 03, 2006

Northeast flood victims may be uninsured

Source: By Kathy Chu, USA Today

Flooding caused by the torrential rain that’s swept over the Northeast in recent days will deal a severe blow to the region’s homeowners, most of whom have no flood insurance. Homeowners’ insurance typically covers rain that comes in from the top or side of a house — not through basements. In most cases, only homeowners who’ve bought flood policies from the federal government are insured against floodwaters that seep in through the bottom of the home.

Inside high-risk flood areas, only 28% of homes are covered by federal flood insurance in the Northeast, compared with 49% nationwide, according to the Rand Corp., a research firm. Outside high-risk areas, 0.6% of Northeast homes and 1% of homes in the USA are covered by flood insurance.

“We’d have to go back over three decades to find anything comparable to the type of flooding we’re seeing in the Northeast,” says Dennis Feltgen, a National Weather Service meteorologist. Flooding has caused damage in states including New York, New Jersey, Pennsylvania, Delaware and Virginia.

Federal flood policies pay for up to $250,000 in damage to the home’s structure and $100,000 worth of damage to the contents. Those who have the government’s policy, but whose homes cost more than this amount to replace, can buy additional coverage from a handful of insurance companies. To do so, a homeowners’ policy with that company is often required.

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