In wet California, few homeowners are immune from flooding

On Sunday morning, Kyle Starks woke up to flooding that reached the door of his jeep after another heavy downpour flooded California. Emergency crews arrived with boats to get Starks and other residents of his rural mobile home park in Akampo to safety.

In addition to the physical destruction, the storm can also deal a financial blow: Starks has no flood insurance.

“I didn’t think it would be this big a flood,” he explained from the evacuation center, concerned that the water had damaged wiring and air-conditioning equipment.

In California, only about 230,000 homes and other buildings have flood insurance policies that are separate from homeowners’ insurance. This means that only about 2% of the properties are insured against flooding. The federal government is the insurer for most of them – about 191,000 as of December. The rest was issued by private insurers, according to the latest state data for 2021.

California has received 32 trillion gallons of rain and snow since Christmas. The water washed out roads, cut off power and caused landslides, soaking hills charred by wildfire. It caused damage in 41 of the 58 counties in the state. At least 21 people died.

It takes focused research to understand the role climate change plays in specific weather, but warmer air means storms like those that have swamped California in recent weeks could carry more water.

However, a drought in California has dulled the sense of flood danger. People tend to buy insurance after disasters when the risk is intuitive, said Amy Bach, executive director of insurance consumer group United Policyholders.

“People think that the only people who need flood insurance are people who live right on the beach or on the banks of a river that has been flooded multiple times before,” Bach said.

When you buy a house, the main document will be the official maps of the Federal Emergency Management Agency, which indicate whether the house is in a high-risk flooding area. If so, and you have a federally backed mortgage, you must buy flood insurance, which costs an average of $950 a year. This is required by many banks.

However, FEMA maps are limited and only take into account certain types of flooding—they don’t actually predict flood risk. For example, floods caused by heavy rains that prop up storm drains are not taken into account. Restrictions mean that flood risk is underestimated at the national level. According to Matthew Eby, executive director of the First Street Foundation, a risk analysis organization, maps especially reduce the likelihood of a natural disaster in California.

FEMA maps do not show Stark’s mobile home in a high-risk area. And three years before his neighbor Juan Reyes bought his house, a series of storms hit the state with record rainfall and flooded their neighborhoods.

Reyes knew this, but he still didn’t buy flood insurance. According to him, it is too expensive and not required. In addition, he thought that the local authorities had improved the storm sewer system so that a similar flood would not happen again. But it happened, and Reyes also had to be rescued by boat. He is in the same evacuation center, hoping his house isn’t too badly damaged.

The hurricanes have damaged several thousand homes so badly that they need to be repaired before people can live in them again. But Nicholas Pinter, a professor at the University of California, Davis who studies watersheds, said California needs to be ready for even bigger events, and that requires much more investment in flood protection and greater awareness of flood risk.

“It is alarming that the damage was as great as that from extreme but not catastrophic flooding,” he said.

Even without flood insurance, state officials said they are trying to help people file a claim — for example, flooded cars are sometimes covered by auto insurance policies.

Also trying to figure out how to bounce back is David Enero of Merced, a community of about 90,000 in California’s Central Valley that was hit hard by the floods. The water was up to his ankles in his house. The laminate in his living room was floating.

“It was like walking on a wave or a trampoline,” he said. The house smells like a mixture of mold, rotten hay and an overflowing septic tank.

Enero lives in a high-risk area where people have to buy flood insurance. He says it would be unimaginable to pay for the damage on his own. Looking back, he wished he had insured his belongings as well.

While the cards force Enero and other companies in certain areas to buy coverage, FEMA no longer uses its famous cards to set prices.

The agency updated its prices in 2021 to more accurately reflect risk and called it a Risk Rating of 2.0. FEMA says these revised prices, not flood maps, inform consumers about flood risk. The old system focused more on simple metrics—the height of a house and whether it was in a mapped flood zone. A risk rating of 2.0 takes into account distance to water, damage from heavy rain, and many other factors. It raises rates for about three-quarters of policyholders and offers price cuts for the first time.

FEMA has long stated that the new ratings will attract new policyholders with prices that reveal the true risk of ownership and are more accurate. However, since they went into effect in California, the number of policies has fallen by about 5%, continuing a multi-year decline across the country.

Some do not realize their risk.

Jay Laub, one of Reyes’ neighbors who was also rescued from the flood, said that when he bought his house, insurance companies basically tried to sell him earthquake insurance. He said he assumed his house was covered from the flood. This week he found out that this is not so.

Laub said he was worried that his mobile home could sink into the damp earth, which could require it to be re-levelled. He said he wasn’t sure how he would pay for it.

“What are you doing? You’re on welfare, like me,” he said. “But you know what? You do it step by step. You just have to stay strong.”

Trevor Burgess, CEO of private insurance company Neptune, said the hurricanes have started new policies. In the first 10 days of 2022, the company sold 53 vehicles in California. Neptune has sold 313 units this year, up about 500%.

“Storms, despite representing this terrible tragedy — a human tragedy and a tragedy of property — remind people that they are vulnerable and must protect themselves,” Burgess said.

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