Flood Insurance: The Flip Side of Katrina

One of the questions New Orleanians have heard most often from outsiders since the 2005 flood is, "Why didn't you all have flood insurance?"  The answer bewilders those outsiders: Mortgage holders told homeowners, you're living inside a federal levee system, you don't need flood insurance.  When the system proved catastrophically defective, we all saw the result. (Parenthetically, even so pre-K New Orleans had the highest uptake of flood insurance of any city in the nation)

Now comes my old friend Judy Muller (we met during the second O.J. trial) with a piece about the flip side of this problem -- FEMA using defective flood zone maps to force people in various parts of Los Angeles that have never flooded to buy flood insurance or jeopardize their mortgages.   One of the anomalies: FEMA discovered that something they thought was a levee in the 1970s turned out to be a raised railroad track, triggering the redefinition of the neighboring streets as flood zone.

FEMA and the Corps of Engineers: partners in progress.

 

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Comments

[Stuart]

My personal experience with flood insurance in New Orleans began in 1997, when I purchased my first home.

The real estate and insurance agents mentioned it, but also noted that this house was not in a flood zone. With that, it was left up to me. The mortgage company did not require it.

My original agent retired around 2000 and her successor did convince me to sign up for the flood insurance. Five years later, I was able to more fully appreciate his advice.

The lesson from this is that New Orleans homeowners, so often maligned by the Ed Blakelys of the world, weren't the only people who naively placed their trust in the Corps of Engineers' flood protection system . Institutions with real money in the game -- insurance companies, banks, mortgage companies -- were just as surprised that the floodwalls fell over hours after the storm had passed.

Pardon the mixed metaphor, but if those companies had any inkling that our Federally built floodwalls were cosmetic, you can bet that New Orleans would have been diagnosed long before Katrina as having a "pre-existing condition."

[maxfax]

If Congress used the same effort and intensity invesstigating ACOE and FEMA, that they did going after ACORN, we may have progress.

Instead I sense politics.

[RepugsOut08]

Why is there no mechanism for stopping, or at least suspending (pending an investigation), a forced insurance requirement like the one in Los Angeles, after the data requiring the insurance has been found to be tainted?
Sadly, this is why it's so hard to convince some people that government can do some things, like health care, right.
But, maybe not. They now seem to have taken a simple plan like expanding Medicare for everyone, and appear to be creating a forced health insurance Frankenstein monster that helps no one but the insurance industry. Am I seeing a pattern here?

[JoAnn Livanos]

We have always kept flood insurance on our homes in New Orleans. We had full flood insurance notwithstanding the fact we were in "Flood Zone A" which meant that our mortgage company did not require us carry flood insurance. Further, our home was terraced about 6-8 feet above the our immediate neighbors. By the Grace of God, our home did not flood. Therefore, there was no debate between insurers about who should bear what percentage of the cost. Our hazard insurance carrier was contracted to bear all of our costs under the policy.

The last check we got from them was almost 1 year post Katrina and it was less that 1/3 of what our damages were as adjusted immediately after the storm. Of course, supply and demand drove the costs of building materials and labor as time wore on and more insureds received their claim payments and sought out services to repair their homes and businesses. Because we were well insured we did not apply to FEMA or Road Home for help reasoning that others required the money more that suffered flooding.

We are even as we speak embroiled in litigation with Travelers Insurance because they have failed to pay our claims pursuant to their valid hazard insurance policy.

[HoppinHill]

Once again Harry is right. South Louisiana was the region with the highest insurance participation rates as noted by Craig Colten in his new book Perilous Place Powerful Storms.

"At the time Katrina struck in August 2005, Louisiana had significantly higher flood insurance subscribership rates than the national average. One report indicated that 64% of flooded homes had flood insurance," notes Colten.

This has been one of the more stubborn myths that has been used to disparage New Orleans and its citizens in their journey to rebuild homes and lives.

[SCMagnolia]

Harry in the early 2000's when I lived in the FL Keys, we received a letter from FEMA saying everybody had to have insurance or jeopardize our mortgages. Up and down the Keys, many people balked, but, I, for one - given the hurricane history of the Keys - agreed, rationalizing insurance as one of those "necessary evils." But, that's nothing like what you're talking about in NOLA or CA. Homeowners were knowingly deceived by mortgageholders as well as the fine-upstanding, totally accountable and efficient government agency, FEMA ::snark:: - in both instances. And who are the number one beneficiaries of the lies?? That necessary evil - insurance companies.

[Raul Garcia]

I watched a piece on this last night on KCET's SoCal Connected. The City of Los Angeles was also negligent in verifying the accuracy of the maps.