Hurricane Irene Teaches Flood Insurance Lesson

Hurricane Irene has passed. The good news is the storm did not hit New York and New Jersey with the category 3 or 4 wind levels that we all feared; the bad news is that the majority of the $10 billion plus in damage will fall under the category of “flood”, which is typically excluded under homeowners policies. Much of the flood damage won’t be covered because few northeastern residents participate in the National Flood Insurance Program. Why?  Because they never think it's going to happen to them.  And because their mortgage lender didn't require they do so. Since the wind speeds were below estimates, only a small fraction of the losses occurred as a result of high winds, the majority of the damage came as a result of massive rainfall causing rivers to crest over 100 year highs, resulting in extensive wide-spread flooding. Experts say that with flooding the main culprit, a majority of items damaged will be not covered by insurance claims. This should be a wake-up-call to homeowners about the importance of having flood insurance. Hurricane Irene, was not as strong as feared, and the quick ...