Lack of insurance haunts victims of floods / LJWorld.com

Archive for Sunday, March 23, 2008

Kansas Insurance commissioner Sandy Praeger expects some areas of the state may be susceptible to flooding because of the wet winter and the already saturated ground. Praeger was photographed on the Kansas River levee in North Lawrence near the dam.

By Christine Metz

March 23, 2008

Washed Away

Everyday Krista Appleton thinks of something she lost from last year's flood. When the levee was overtopped in Osawatomie last summer, Appleton's home was among those overcome by water. She - like almost every other homeowner in town - didn't have insurance. It's been devastating, she said. Enlarge video

Purchasing Flood Protection

Kansas Insurance Commissioner Sandy Praeger advises those in flood-prone areas to purchase insurance - even those who sit outside the designated 100-year floodplain. Enlarge video

Lawrence Underwater

It's just not Southeast Kansas that floods, Lawrence has suffered, too. The most memorable floods were in 1951 and 1993, but there have been some pretty heavy soakings in between. Watch video footages and photos to see just how high the water went. Enlarge video

Lack of flood insurance haunts many Kansans

For those without flood insurance, homes can be lost in a matter of minutes. Compared to other parts of the country, Kansas homeowners are less likely to purchase the protection. Enlarge video

Photo by Richard Gwin

Krista Appleton, right, who now lives in Lawrence, and her daughter, Stacy Neuerburg, 19, watch TV in their new home, after floods ruined their home last July in Osawatomie.

Illustration by Karl Gehring

It's not just those who live right beside the river who fall in the 100-year flood plain (a designation given to areas that a have 1 percent chance of flooding every year). Check out this map to see where your property lies.

At night, the images return.

Surreal and Dr. Seuss-like, a couch is stacked on a glass table that's propped on a snow globe. The front door opens, and a bag of Doritos drifts by in waist-high water. An aloe vera plant follows. A table floats with an empty wine glass from the night before still in place.

"It is always going to be there in my brain," Krista Appleton said. "That there was this bizarre stacking of stuff."

Count Appleton among survivors of last summer's flood in Osawatomie. Her home wasn't so lucky. On July 1 - after a levee across town failed - Appleton's home was submerged to the roof in floodwater.

It was a four-bedroom, two-bath, two-car garage home. One she'd owned for eight years, raised her family in and worked long hours to cover the mortgage.

Like nearly all of the town's 4,500-plus residents, Appleton didn't have flood insurance. In all, she and her three children lost about $250,000 worth of property.

"It's your home, it's your memories, it's where (my children) grew up and it's gone. Like in a day, it's just gone," she said.

Appleton isn't alone.

Underwater and underinsured

Compared with other areas in the United States, Kansas homeowners are less likely to buy flood insurance, even if they live in high-risk areas, said Tom Morey, the state's coordinator for the National Flood Insurance Program.

The Associated Press reported that only 1.3 percent of Kansas homeowners had flood insurance in 2007.

The trend leaves many people struggling, long after floodwaters recede.

Federal Emergency Management Agency spokesman Brian Bowman said FEMA didn't track how many homeowners in southeast Kansas suffered damages last July and didn't have flood insurance to cover them.

But anecdotal evidence from state agencies would say many were in that situation. In some communities, it seemed to be the vast majority of people whose homes were flooded.

No more than six of the 200 to 300 homes that were damaged in Osawatomie had flood insurance, according to the Kansas Insurance Department.

"These people really just lost everything," Insurance Commissioner Sandy Praeger said.

Last week, flooding again was on the minds of a few national and state officials.

Along with a St. Patrick's Day downpour and news of flooded towns elsewhere in the Midwest, it was National Flood Safety Awareness Week. So FEMA's flood insurance administrator, David Maurstad, and Praeger toured Kansas City's flood-prone Brush Creek.

Before leaving Kansas City on Wednesday morning, Maurstad predicted a spring ripe for flooding. Repeated winter storms left the ground saturated. Streams and rivers are close to overflowing. Ponds are near capacity.

"In the Midwest, we are seeing a lot of the same conditions that we did in 1993," Maurstad said referring to a year that racked up more than $15 billion worth of flood damage in nine Midwestern states.

Flood zone

When Appleton built her house a few hundred yards from a levee, no one warned her about flooding - not her mortgage company and not the U.S. Army Corps of Engineers, which said it was OK to build there.

The Wyoming native didn't think to ask. And until the day the water rose so high it covered the roof of her house, there hadn't been so much as a puddle on her property in eight years.

When she was told floodwaters were coming, Appleton started putting valuables on countertops. That was laughable optimism in hindsight.

"I don't know how many people could ever be prepared for seeing the water go up over their roof," Appleton said.

Flood insurance - despite what a third of U.S. heads of households believe - is not included in a standard homeowners insurance policy.

For people living in high-risk flood areas, flood insurance is required to obtain a home loan. Many homes sitting behind levees - built to hold back floodwater - aren't considered high-risk, according to FEMA floodplain maps. This is true even in Lawrence.

But as nature proved first in New Orleans and later in Osawatomie and Coffeyville, that isn't always the case.

In the real world, floodwaters don't stop at a line on a map. One in every four claims to FEMA are from people in low- to moderate-risk flood zones.

FEMA spokesman Bowman believes both homeowners inside and outside the high-risk flood zone have a false sense of security.

"The floodplain is not necessarily a line drawn to show who is going to flood and who is not," Bowman said.

The recovery

After the flood, Appleton salvaged family keepsakes - quilts made by a great-grandmother, photo albums, china dishes - but not much else.

FEMA gave her about 10 cents for every dollar she lost. She had the option to use a low-interest loan through the U.S. Small Business Administration to help rebuild her home.

The loans are to help where insurance doesn't. About 130 homeowners in southeast Kansas have borrowed $28.5 million.

After looking at what it would cost to continue to pay the mortgage and tear down and rebuild the house, Appleton decided to walk away. She's filing bankruptcy.

"It seems insane to me that people are building in the same spot," she said.

Today she lives in Lawrence. A friend offered her low rent at a house that was on the market but not selling. Her 19-year-old daughter shares the home, and Appleton has continued working at her job managing benefits for Yellow Transportation in Kansas City.

Many homeowners have the misconception that during times of federally declared disaster, the government will pick up the tab, Bowman said.

Yes, short-term assistance is given and low-interest loans are made, but it's a far cry from a flood-insurance policy designed to cover the full cost of the damage.

"FEMA isn't designed to make you whole. Insurance is designed to make it the way it was before it happened," Bowman said.

It's not easy losing your home, but Appleton says worse things can happen. Sitting on a newly purchased couch (compliments of FEMA) in her southeast Lawrence townhouse, Appleton's flood stories are filled more with laughter than despair. Her sense of humor didn't wash away.

However, when the topic of flood insurance comes up, her tone turns as serious as a public service announcement.

"For yourself and your family, make sure that you are insured," she said. "Because you don't want to be left where we are."

Q: Doesn't my standard homeowners insurance policy cover flooding?

A: No. While your homeowners insurance is good for recovering losses from fires and windstorms, most policies don't cover damage from floods. A flood policy backed by the Federal Emergency Management Agency is needed for that. By definition, flood insurance covers damage from when surface water inundates a normally dry area of land. So, it's good for when the Kansas River overflows its banks or a heavy downpour spurs a flash flood and the city's drainage system backs up. The flood insurance policy doesn't cover sump pump failure or sewage backup (an additional rider is needed for that).

I don't live on a hill, but I don't live next to the river either. Do I still need flood insurance?

FEMA claims that everyone lives in a flood zone.

Nicole Madril, a licensed agency specialist for American Family Insurance, said the decision depends on what kind of risks the homeowner is willing to take.

According to FEMA, the average homeowner is five times more likely to see flood damage than fire damage.

To best determine your home's risk, look at FEMA's flood plain maps, which define what areas are likely to see rising water during a storm that would come once every 100 years. In those zones, homeowners can't get a mortgage without a flood-insurance policy. The maps also designate areas with moderate and low risks of flooding.

FEMA's maps can be found at the Lawrence Public Library, City Hall, or go to FEMA's Web site, www.floodsmart.gov.

If I am outside a high-risk area, am I safe?

Close to 30 percent of all insurance claims come from those who live in low- to moderate-risk flood areas.

While FEMA maps designate where water should go during the storms that come once every 100 years, nature doesn't always stay within those boundaries. It might be a good idea for those bordering high-risk flood zones to consider flood insurance. Also, as the floods from Osawatomie to New Orleans showed, levees don't always hold. So those living close by one might want to evaluate their risks.

I've heard that not everyone can purchase flood insurance. Is that true?

As long as your community follows the National Flood Insurance Program, you can purchase flood insurance. Lawrence, like most cities in the state, follows that plan.

How much does flood insurance cost and what does it cover?

For those living within the high-risk flood zone, it could mean a $600 to $800 annual payment. For those who live in moderate- to low-risk areas, it could be as little as $150 a year. FEMA's flood insurance policy does have its limits. The policy covers structural damage of a home up to $250,000. An additional insurance policy can be purchased to cover belongings for up to $100,000. Also, the policy doesn't cover many of the contents that sit in a basement.

During times of major flooding, I thought the U.S. government offered aid?

It does, but much of the money given to flooded-out homeowners comes in the form of loans. Those loans come with a 3 percent interest rate and have to be paid back in 30 years.

Can I wait until floodwaters are lapping at my door before signing up for flood insurance?

No. It takes about 30 days before a flood-insurance policy goes into effect.

Discussion

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23 March 2008
at 6:40 a.m.

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Marion (Marion Lynn) says…

Anyone can buy and afford flood insurance along with another rider not often obtained; earthquake insurance.

I learned about insurance when I had a $50,000.00 automobile stolen and it was not insured! I hadn't paid $50 K for it but $50K was the fair market value at the time it was stolen and I would have been paid that sum had I not neglected to get the policy written.

I cannot believe that people would go into debt for $250K USD and not have complete and full coveragae on their investment!

It is a shame that government has to be in the education business and even more of a shame that insurance agents, who represent the biggest invisible bankers on the planet, do not properly advise clients regarding flood insurance.
23 March 2008
at 10:29 a.m.

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gccs14r (Anonymous) says…

I'm on very high ground. Not KU-high, but high. It'd take a Noah-type flood to get me. I don't have a basement, either, nor do I have storm drains or more than a half-dozen houses upstream of me. I think I'll be OK.
23 March 2008
at 10:41 a.m.

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Godot (Anonymous) says…

All it takes to make a “flood” is for water to rise rapidly (say, in the street, maybe due to overloaded storm sewers), and enter your home. This could even happen on high ground.
23 March 2008
at 10:46 a.m.

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monkeyhawk (Anonymous) says…

Surely, this is not an attempt to revisit this earliest form of “smart growth”.

http://www2.ljworld.com/news/2002/mar…
23 March 2008
at 11:03 a.m.

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Godot (Anonymous) says…

There may be more to come regarding redrawing the flood plain in Lawrence. Has something to do with the condition of the levee, or so I hear.
23 March 2008
at 5:20 p.m.

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toefungus (Anonymous) says…

Flood insurance. Who needs it? The government will bail you out.
23 March 2008
at 11:45 p.m.

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Marion (Marion Lynn) says…

Don't build where the water goes.

23 March 2008
at 11:45 p.m.

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Marion (Marion Lynn) says…

Either that or buy flood insurance and pray for rain.
25 March 2008
at 2:29 a.m.

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karlhungusjr (Anonymous) says…

I've heard that not everyone can purchase flood insurance. Is that true?

As long as your community follows the National Flood Insurance Program, you can purchase flood insurance. Lawrence, like most cities in the state, follows that plan.

and if your community doesn't? well thats just too bad.
they make a huge deal about how many people don't have flood insurance but fail to tell you how difficult it is to get it.

I live in a very small Kansas town and its not in the NFIP. I called FEMA, and every insurance company in east kansas trying to get flood insurance and I got the same answer everytime “If your community isn't in the National Flood Insurance Program you can't get flood insurance. sorry.”

The only other advice i got besides that standard line was “you might try Lloyd's Of London. they write policies that most companies wont”

The NFIP is a joke and a ripoff.
4 April 2008
at 4:51 p.m.

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johnbrown2001 (Anonymous) says…

I understand where Krista is coming from! i actually know Krista, i lived right next to her in Osawatomie! Within a matter of seconds, everything gone! And it's not fair! FEMA just throws an amount of money at you and it's like, “ok here ya' go…go replace everything with this.” But sometimes it's not enough. It took me about 9 months after the flood to find a place to live. Everything that you have ever had in your life, gone! And mostly everything at my apartment could not be replaced.