Flood Insurance: Worth it? Or a Rip-off

[Lil Missy]

I live on the west border of Iowa in Council Bluffs Iowa, near the Missouri river. (Council Bluffs Iowa borders Omaha Nebraska, with the river separating the two cities)

It was approx. 4 years ago this area was under a flood threat all summer due to parts of the river upstream being manually redirected to this area. I am on what is considered the "flood plane", but my home was not affected.(some of my neighbors had flooded basements, however) I was offered flood insurance for future coverage and I took the offer.

Now this will be the 3rd year I pay the annual premium, about $400, and now I wonder if it's really wise to keep it. As I understand it, flood insurance would NOT have been paid on any claims for the flood approx. 4 years ago since it was man made flood - river was re channeled from upstream that inevitably affected those downstream. That was a man made flood, therefore not payable by insurance. (OF COURSE that is bullshit, but I'm not here to argue that)

It's not likely we will have a natural flood, and I'm "supposedly" in an area near levees that were completely restored after the 2011 flood, which is supposed to be a little safer. (Safer than WHAT, I don't know)

Money is tight and I'm up to my ass in alligators with debt. So I'm considering dropping the coverage. Incidentally, Flood Insurance is issued by FEMA, and is completely separate from Homeowners Coverage.

Anyone else have experience with Flood Insurance - filing a claim or in the insurance industry with some insight on Flood Insurance? Worth it? Or a Rip-off?

Thank you in advance

[sendero]

1. This is a good question..

... and unfortunately an impossible to answer one.

Any time you buy any insurance, you are not only paying the costs to reimburse any loss you might incur, you are paying for the overhead, profits and other expenses the insurance company incurs.

In the case of auto insurance, about 67 cents of every dollar paid is paid out to cover damages to vehicles and etc. In the case of homeowners, it would be .87 of each dollar. So if you get homeowners insurance, you are betting you will have a loss and if you are correct you will come out ahead. If not, well you know.

What you really need is a professional assessment of what the actual likelihood you will ever experience a flood is. Probably hard to come by. Based on your premium, the insurance company doesn't really think it is very likely OTOH, if you DID experience a flood, could you weather the effects without insurance?

In the face of ever rising (and fast) homeowners renewals, we almost decided to just "go naked" and drop the insurance altogether. We backed down, but we did lower our coverages to reduce our premium about 25%.

I realize I probably not helped much but that's all I got

[hifiguy]

2. It seems that it would depend on where the water table

is in the place where you live would be the key factor. Or if you live on a flood plain.

[cstanleytech]

3. Well your just going to have to weigh the odds and decide for yourself if its worth it to be honest.

I would probably make cuts to my cable and phone services to pay for the insurance if there is a chance just to have the safety of coverage incase a huge wtf hits and my house did get flooded.
I do know one way you might be able to save some dough is if your still using a landline just for phone at home ditch it for one of the wireless @home deals as they are far cheaper as att wanted 130 a month for landline service where im at a month and i bought a verizon @home wireless box which is costing me 26 bucks a month now.

[madokie]

4. Where I live it would be

if I lived in town not so much as if one of the upstream dams were to give way the town would be submerged by 7 to 10 ft of water according to the experts. I'm about 80 plus or so feet higher.

[NV Whino]

5. There is no good answer to this

But i'm sure you've already guessed that.

Why not try to beat the insurance guys at there own game, which is statistics. Check out a college or university nearby and see if they have any statistics classes. Present the problem to the class or individuals and see what you come up with.

[cbdo2007]

6. If it is going to flood, then yes. If it is not going to flood, then no.

If it does flood, and you don't have insurance, will that be more of a hardship than if it doesn't flood and you do have insurance?

[Daemonaquila]

7. Look at the history of your area.

As a rule, I would keep it. Only if there is NOTHING that has happened in your area for the last hundred years, would I think about stopping it.

We live in a flood plain. It sounds crazy, because we live a block away from a creek. A LITTLE creek. A LITTLE creek, however, that can have some incredible rise during heavy rain. When conditions are just right - lots of rain that season, then a big storm over saturated ground upstream (which last happened with the remnants of a hurricane), you can get some hellacious flash flooding. We literally can be facing no more than 30 minutes to 2 hours of warning. But the floods don't happen for 20-50 years at a time, so people get complacent.

We had our first flood 1 month after we moved in. We were insured. We cleared out with the cats with a 20 minute warning from the fire department, and were running to the cars as the floor was shaking because the water had flooded into the basement and was hitting the floorboards with a lot of force. We had all our fences taken down, lost all our boxes that were temporarily in the basement, had the pool filled with mud, lost every HVAC duct in the house and parts of the HVAC system, had damage to our water heater, and everything was covered in sludge. We were lucky - unlike some of our neighbors, the water stopped at the floorboards, it didn't wet the inside walls, and we had no carpeting to damage. It still took us 2 months for basic cleanup inside and out, and repairing damage to the HVAC.

We would've been pretty much wiped out without insurance. While flood insurance doesn't cover anything outside (not that big a deal if you have a regular yard, but a really big deal when you have a pool full of damaging mud and a lot of fencing that's now matchsticks), it covers the really important stuff that will destroy your home and make it unliveable. Not everything will be covered enough to put you back in the shape you were in. We had to keep some salvageable parts of the HVAC machinery (which crapped out on us 4 years later) and the water heater (which is still going strong), but it paid many thousands for the parts that were trashed. Entirely redoing all ducting and half the HVAC costs a mint.

We got a check in less than 10 days. That's not everyone's experience, but we had a good adjuster who came in about noon the next day and was actually quite helpful in trying to get us a good deal that would cover the stuff that was expensive to repair or replace. Our neighbors, who had water up to 2 feet inside their whole house as well as his commercial workshop, and who had specialty tools, stock, raw materials, and more in the building, would also have been ruined. However, with the kinds of damage they took and the partially commercial use of the property, theirs took longer to work out. However, they have rebuilt and are back to normal.

You also may want to check the rules for getting flood insurance later if you cancel. I haven't had to look at that in a while, but I remember some not-so-happy consequences of having to restart it after letting it lapse.

[procon]

8. Its a gamble

As with any insurance, you pay for the possibly that that you will one day need that coverage. You pay for years and years even if you never have to use it, but when the time comes, its the only protection you'll have against losing everything you own. Flood damage is tricky stuff, and your regular home insurance will try to lump everything under that category to avoid paying a claim. If you don't have any flood insurance, you might end up with nothing, so weigh your risks carefully.

[dembotoz]

9. what kind of flood plain are you in

the fact you have levees would make me a bit nuts

but i am not sure if i have ever seen a levee.

but if it is noah time we are all fucked anyway

[Lil Missy]

10. THANK YOU FOR THE COMMENTS

I'm leaning towards renewing it. I'd be SICK SICK SICK if we had another flood and I wasn't covered.

It's only money ....

Thank you all.