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Offbeat Florence to cause misery for homeowners without flood insurance

23:25  16 september  2018
23:25  16 september  2018 Source:   usatoday.com

One man plans to ride out Hurricane Florence on his boat

  One man plans to ride out Hurricane Florence on his boat A mountain man from North Carolina is planning to remain aboard his 46-foot cabin cruiser as Hurricane Florence strikes near Myrtle Beach.LITTLE RIVER, S.C. – Rolling up some plastic windows on his 46-foot cabin cruiser Wednesday, Masten Cloer admitted he was nervous. A new weather forecast predicted Hurricane Florence changing paths to make a landfall near his marina at the border of North Carolina and South Carolina.

Lack of flood insurance heaps misery on homeowners slammed by Hurricane Florence . The drenching rains and massive flooding caused by Florence are expected to inflict a high financial toll on homeowners in North Carolina and other states, as only a small percentage are covered by flood

Standard homeowners and renters insurance does not cover flood damage. Find out if you need flood insurance and learn where to get it. It's important to note that, as a rule, homeowners and renters insurance does not cover damage from flooding . To protect your home , be sure to

The drenching rains and massive flooding caused by Florence are expected to inflict a high financial toll on homeowners in North Carolina and other impacted states. Only a small percentage of people that have flood insurance that could help offset the costs of rebuilding their homes damaged by storm surge and rivers overflowing their banks.

Estimates from insurance analysts and actuaries show an alarmingly high percentage of homeowners — both in coastal towns and those far inland — that are underinsured for a water-driven natural disaster as destructive as Florence.

Florence likely to expose gaps in flood insurance

  Florence likely to expose gaps in flood insurance After nearly a decade of declines, more Americans are buying flood insurance. NEW YORK — The number of Americans with flood insurance is on the rise, yet Hurricane Florence is likely to make it painfully clear that too many homeowners in the Carolinas and other vulnerable regions remain unprotected.

Got flood insurance ? Thousands of homeowners in Hurricane Florence ’s path do not. Record rainfall that October triggered floods that killed at least 19 people in South Carolina and caused extensive damage to Federal flood insurance isn’t a cure-all for homeowners hit by flooding .

Long Sutton in Somerset faced the prospect of more heavy rain and storms, even as houses were evacuated and flood defences breached as the River Aller burst

Only 10 percent to 20 percent of coastal homeowners in the hard-hit eastern part of North Carolina, for example, have coverage through the government’s National Flood Insurance Program (NFIP), and only 1 percent to 3 percent of homes in inland counties have flood policies, according to estimates from John Rollins, an actuary at consulting firm Milliman. Statewide, roughly 3% of the homes in North Carolina have flood coverage and 8% of homeowners are covered in South Carolina, Rollins said.

Track Tropical Depression Florence

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An estimated quarter of a million homes in North Carolina are projected to be affected by Florence, which has caused flash flooding and record rain amounts across the state, according to CoreLogic, a property analytics company.

“Obviously, that leaves a lot of people uninsured,” Rollins told USA TODAY.

The numbers are low, he adds, because people think that because their home isn't in a high-risk zone designated by the government that there's "zero risk" of a flood. "But that's not true," Rollins says. Many also don't realize their basic homeowners policy doesn't cover flood damage, while others overestimate the disaster aid they will get from the government.

Unfortunately, standard homeowners insurance won’t cover any flooding-related issues. The estimated insured losses from Florence are in the range of $3 billion to $5 billion, according to CoreLogic, but could go as high as $10 billion to $20 billion, says Goldman Sachs, a Wall Street bank.

Insurers should have no problem being able to pay out claims to policy holders, as the broader insurance industry has cash reserves of roughly half a trillion dollars, according to Matt Carletti, senior insurance analyst at JMP Securities.

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The problem for homeowners is that insured losses generally only are about one-third of total economic losses, which puts them on the hook financially for a more sizable part of their home rebuilds if losses are due to uncovered flood costs, adds Carletti.

To get flood coverage, homeowners must buy a separate policy. Most purchase this extra coverage from the government-backed NFIP program, which is designed to restore your home to its pre-flood condition and replace your possessions. NFIP policies, which carry average premiums of around $600 to $700 but can run into the thousands of dollars in high-risk zones -- cover up to $250,000 for a home's structure and up to $100,000 for personal possessions.

Homeowners not covered for flood damage can seek federal disaster assistance in the form of grants from the federal government or apply for a loan from the Small Business Administration, says Steve Bowen, director at impact forecasting firm Aon Benfield.

At the end of July, there were 134,306 active NFIP flood policies in place in North Carolina, says Bowen. But that's only 3 percent of the estimated 4.62 million housing units in the state, he adds, citing U.S. Census Bureau data.

Damages to homes caused by floods tend to be costly. The estimated potential loss for a 1,000 square-foot, single-story home with possessions worth $20,000 that is inundated with just one inch of interior water can run as high as $11,000, according to FEMA data, and the estimated loss for five inches of water climbs to more than $18,000.

Given the fact that many parts of North Carolina have received rain totals of two feet or more, many homeowners will be facing high rebuild costs they may not be able to afford.

“You are looking at a lot of homeowners that will have out-of-pocket costs that could easily be five figures, or more than $10,000,” says Cathy Seifert, an insurance analyst at CFRA, a Wall Street research firm.

The Latest: Car swept off by floodwater; 88-year-old dies .
The Latest on Tropical Depression Florence (all times local):2:40 p.m.North Carolina environmental regulators say several open-air manure pits at hog farms have failed and are spilling pollution.Department of Environmental Quality Secretary Michael Regan said Monday that the earthen dam at one hog lagoon in Duplin County had been breached. There were also seven reports of lagoon levels going over their tops or being inundated in Jones and Pender counties.Regan said state investigators will visit the sites as conditions allow.

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