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This is one area I don't think the gov't should be involved in...we have home owners insurance...let them cover flooding too...if the rates go up by you being stupid enough to live on the coast or in a flood plain, thats on you...plenty of areas that don't flood
Yep.
Example #1,243,782 of the government messing up insurance plans both federal and state over the years.
After they jack things up, their next play is to blame the insurance companies.
<<Points to auto insurance costs in MI and NJ etc.>>
It's not cheap. The cost of a FEMA flood insurance policy for an oceanfront home in my area is about $7,000 per year. The maximum payout is $250,000 and the policy pays only the depreciated value on the home.
Several oceanfront homes were wiped out a little south of here by a hurricane several years ago. They were 40-ish year old 5 to 6 bedroom homes which together with the land they were on were each worth about $1.5 million. Because of the depreciated value on the homes, FEMA flood insurance paid out only $70,000 or so per home. That came as a shock to quite a few people. If not required by a mortgage, FEMA flood insurance isn't a good deal. Put the $7,000 per year premium in an investment account, make money on it, and in about 7 years or so you'd have whatever FEMA flood ins would pay out without having to pay any premiums in perpetuity.
100%. I read one time the average flood insurance payout was a shade over $40K - also think it said the average lake house payout was just over $30K.. Given the costs, very limited benefits and quite frankly the hassle factor IMO just about the only people who should buy this these policies are those who must per mortgage rules.
A complicating but solvable factor is many residential policies are unavailable without a separate flood insurance policy based on certain FEMA designations.
Frankly, from a cost v. benefit angle it's almost a scam as your $7K premium vs. $70K payout underscores.
100%. I read one time the average flood insurance payout was a shade over $40K - also think it said the average lake house payout was just over $30K.. Given the costs, very limited benefits and quite frankly the hassle factor IMO just about the only people who should buy this these policies are those who must per mortgage rules.
A complicating but solvable factor is many residential policies are unavailable without a separate flood insurance policy based on certain FEMA designations.
Frankly, from a cost v. benefit angle it's almost a scam as your $7K premium vs. $70K payout underscores.
That's what people don't realize about the payouts. All they usually see are the houses that are a pile of rubble and not the ones that get a foot or two of water.
100%. I read one time the average flood insurance payout was a shade over $40K - also think it said the average lake house payout was just over $30K.. Given the costs, very limited benefits and quite frankly the hassle factor IMO just about the only people who should buy this these policies are those who must per mortgage rules.
A complicating but solvable factor is many residential policies are unavailable without a separate flood insurance policy based on certain FEMA designations.
Frankly, from a cost v. benefit angle it's almost a scam as your $7K premium vs. $70K payout underscores.
I'd be a little cautious on taking peoples stories as completely accurate as they jumped from their premiums to someone elses payout so we don't know what the other person was paying or their coverage etc. for sure.
As an example:
Assuming that the expenses on the policy are 20%.
Assuming your coastal property gets smacked every 15 years for a 70k loss.
Explain how a 5 bedroom home that was totally wiped out by a hurricane, not just damaged, is worth only $70,000.
That's when someone uninformed and not educated is making a claim that they think they heard or read from someone else who's uninformed and not educated.
Since NONE OF YOU seem to live in a zone that you chose to insure for FLOOD (which is an ADJUNCT to homeowners insurance which STILL COVERS HURRICANES), here's some FACT:
I have Florida hurricane insurance that PAYS FOR HURRICANE DAMAGE and FEMA flood insurance that PAYS FOR FLOODING and am not in a floodplain zone and do not have a mortgage.
It's $325 per year for the flood with a payout of $80,000 for the dwelling not including contents with a $2000 deductable and I live a short walking distance from the FLorida Intracoastal in a condo.
My homeowners is $1200 premium with a payout of $80,000 for the dwelling not including contents this year with a $2000 deductable but LAST YEAR was only $600 for the same coverage two blocks away. In this new condo I'm 1/4 of mile closer to the Intracoastal.
My covered replacement contents are around $30,000 onboth policies.
And it is crystal clear on the FEMA policy how it's covered so homeowners who claim ignorance are just being disengenuous or trying to get a write up in the local paper or on City Data!
Oh snap all assumptions destroyed LOL.
But my dudes, let me know where I can make $120,000 in 7 years on a $7000 deposit somewhere. I think the term "self insured" is confusing some of you.
Policies offer up to $250,000 coverage for homeowners, up to $100,000 for personal property and up to $500,000 each for business contents and building repairs.Flood insurance protects two types of insurable property. The first covers your building, the second covers your possessions; neither covers the land they occupy.
This is one area I don't think the gov't should be involved in...we have home owners insurance...let them cover flooding too...if the rates go up by you being stupid enough to live on the coast or in a flood plain, thats on you...plenty of areas that don't flood
Bingo. Taxpayers should not subsidize poor decisions.
100%. I read one time the average flood insurance payout was a shade over $40K - also think it said the average lake house payout was just over $30K.. Given the costs, very limited benefits and quite frankly the hassle factor IMO just about the only people who should buy these policies are those who must per mortgage rules.
Exactly. You're better off investing what you would have paid in annual premiums. The FEMA payout would be covered in just a few years and you wouldn't have to keep paying premiums in perpetuity.
Quote:
A complicating but solvable factor is many residential policies are unavailable without a separate flood insurance policy based on certain FEMA designations.
You can get a residential policy that will not cover flood damage easily enough. What's interesting is that residential policies for the coast don't cover wind and hail, either. That's yet another separate policy. Many homeowners have to pay annual premiums on 3 different policies: homeowners, wind and hail, and FEMA flood. That adds up, but at least the wind and hail policies aren't so outrageously expensive and the payouts are more in line with the premium costs.
Quote:
Frankly, from a cost v. benefit angle it's almost a scam as your $7K premium vs. $70K payout underscores.
It is a scam for some, and a ridiculous subsidy for others like the home that has had 22 claims earlier in this thread. FEMA flood insurance is horribly mismanaged and the premiums charged DO NOT adequately reflect the risk. Some are WAY overcharged, and others pay little to nothing even with a multiple claim history.
That's when someone uninformed and not educated is making a claim that they think they heard or read from someone else who's uninformed and not educated.
Nope. Real people. Real events. We lose a few houses out here every so often and the facts are the same... ridiculously low FEMA payouts because the homes are about 40 years old. $7,000 annual premium. $70,000 FEMA payout.
Since NONE OF YOU seem to live in a zone that you chose to insure for FLOOD (which is an ADJUNCT to homeowners insurance which STILL COVERS HURRICANES), here's some FACT:
Nope. Homeowner's policies DO NOT cover hurricane damage. They also do not cover wind and/or hail damage from storms including hurricanes. All 3 are separate policies: homeowner's, wind and hail, and FEMA flood. Mortgages typically require all three.
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