In soggy California, few homeowners have flood insurance

ACAMPO, Calif. (AP) — On Sunday morning, Kyle Starks woke up to flood water reaching the door of his Jeep after another torrential rainstorm soaked California. Emergency crews showed up in boats to get Starks and other residents at his rural RV park in Acampo to safety.

Aside from the physical destruction, the storm could take a financial hit: Starks doesn’t have flood insurance.

“I didn’t think there would be such bad floods,” he said from an evacuation center, concerned that the water could damage cables and air conditioning systems.

In California, only about 230,000 homes and other buildings have flood insurance policies that are separate from home insurance. This means that only about 2% of the plots are protected against flooding. The federal government is the insurer for the majority of them – about 191,000 (as of December). According to the latest state data from 2021, private insurers spent the rest.

32 trillion gallons of rain and snow have fallen in California since Christmas. The water washed out roads, knocked out power, and caused mudslides by drenching hills charred by wildfires. It caused damage in 41 of the state’s 58 counties. At least 21 people have died.

More focused studies are needed to know the role of climate change in specific weather conditions, but warmer air means storms like the ones that have deluged California in recent weeks can carry more water.

But the drought in California has clouded people’s risk of flooding. People typically buy post-disaster insurance when the risk is visceral, said Amy Bach, executive director of insurance consumer group United Policyholders.

“People think the only people who need flood insurance are people who live right on the beach or on the banks of a river that has a history of flooding,” Bach said. In reality, far more people are threatened by rushing or rising water.

If you’re buying a home, official maps from the Federal Emergency Management Agency are an important document that will tell you if it’s in a high-risk flood area. If this is the case and you have a state-backed mortgage, you will need to purchase flood insurance, which costs an average of $950 per year. Many banks also require it.

However, FEMA maps are limited and only consider certain types of flooding – they don’t actually predict flood risk. For example, flooding caused by heavy rain that dams storm drains is not counted. The restrictions mean that flood risk is underestimated across the country. According to Matthew Eby, executive director of the First Street Foundation, a risk assessment organization, California is particularly unlikely to have a catastrophe.

The FEMA maps do not show Stark’s mobile home in a high-risk area. And three years before his neighbor Juan Reyes bought his home, a series of storms brought record amounts of rain across the state and inundated their neighborhood.

Reyes knew that, but he still didn’t have flood insurance. It’s too expensive, he said, and not necessary. Also, he thought local officials had improved the drainage system so a similar flood would not happen again. But it did, and Reyes had to be rescued by boat as well. He stays at the same evacuation center and hopes his home isn’t too badly damaged.

The storms have damaged several thousand homes so badly that they need repairs 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 prepared for even bigger events, and that requires far more investment in flood defenses and greater awareness of its danger.

“It’s worrying that there was as much damage as in extreme but not catastrophic floods,” he said.

State officials said that even without flood defenses, they are trying to help people make claims — flooded cars, for example, are sometimes covered by auto insurance policies.

David Enero of Merced, a community of about 90,000 in California’s Central Valley that suffered severe flooding, is also trying to figure out how to recover. The water was ankle-deep in his house. The laminate floor in his living room was floating.

“It was like running on a wave or a trampoline,” he said. The house smells of a mixture of mildew, rotting hay and overflowing septic tank.

Enero lives in a high-risk area where people are required to take out flood insurance. He says paying for the damage alone would be unthinkable. In retrospect, he wishes he had also insured his belongings.

Although the maps are forcing Enero and others to buy coverage in certain areas, FEMA no longer uses their famous maps to set prices.

The agency updated its pricing in 2021 to more accurately reflect risk, calling it Risk Rating 2.0. FEMA says these revised prices — rather than flood maps — communicate flood risk to consumers. The old system placed more emphasis on simple metrics—a home’s height and whether it was in a mapped flood plain. Risk Rating 2.0 takes into account distance to water, damage from heavy rain and many other factors. It increases tariffs for about three quarters of policyholders and offers price reductions for the first time.

FEMA has long said the new ratings would attract new policyholders with prices that reflect a property’s true risk and are more accurate. But since they went into effect in California, the number of policies has declined by about 5%, continuing a year-long decline statewide.

Some are unaware of their risk.

Jay Laub, one of Reyes’ neighbors who was also rescued from the floods, said when he bought his home, insurance companies were primarily trying to sell him earthquake insurance. He said he assumes his home is covered due to flooding. He found out this week that wasn’t the case.

Laub said he worries his RV may have sunk into the wet ground, which could force him to re-level it. He said he wasn’t sure how he would pay for it.

“How’s it going? They’re on Social Security, just like me,” he said. “But you know what? You go one step at a time. You just have to stay strong.”

Trevor Burgess, CEO of private insurer Neptune, said there has been a rush for new policies with the storms. In the first 10 days of 2022, the company sold 53 in California. Neptune sold 313 that year – an increase of about 500%.

“Storms, even if they are this terrible tragedy — a human tragedy and a tragedy for property — remind people that they are vulnerable and need to protect themselves,” Burgess said.


Phillis reported from St. Louis.


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