Business

A River May or May Not Run Through It: FEMA Pushes the Sale of Insurance Policies That Might Not Cover Recent Flood Damage

The Federal Emergency Management Agency, in another glaring example of bureaucratic incompetence, has been confusing property owners along Missouri River Basin.

By enthusiastically pushing the sale of flood insurance policies that may or may not cover damage from the river flooding that began this month, insurance companies and customers alike are bewildered.

Insurers are claiming FEMA, which administers the national flood insurance program, has been urging insurance agents to sell the policies although they contain deadlines that appear to exclude the Missouri River flood damage.

The federal officials explain that some of the damage along the river might still be covered under the program’s convoluted rules, but how much won’t be known until after the flooding is over.

“They won’t give you a clear answer,” said Larry Case, executive vice president of the Missouri Association of Insurance Agents. “It causes issues for agents because they get frustrated when they can’t give policyholders a definitive answer.”

According to The Associated Press:

“The questions primarily affect property owners who waited until recently to decide on flood insurance because their property usually doesn’t flood. The extensive flooding this year – the worst since 1993 – is threatening thousands of acres that normally remain dry. The federal government has been encouraging more property owners along the river to make longer-term commitments to insurance.”

The confusion about coverage stems from a clause in policies that require a 30-day waiting period in flood insurance.

“According to FEMA, the Missouri flood officially began on June 1 so only policies bought by May 2 would have gone into effect and therefore would cover the resulting damage.”

Despite the clear confusion, FEMA continues to encourage people to buy the insurance, noting that some damage might later still be covered if it is attributed to locally heavy rains or other conditions not affected by the waiting period.

Property owners who buy the insurance would have no other choice but to wait for an adjuster to decide whether any damage is covered. Why anyone would risk this is beyond explanation.

As one would guess, many homeowners are unwilling to purchase expensive policies that come with ambiguous terms and guarantees. And the insurance companies are stuck with a product that they cannot sell because they, like the customer, have no idea what it does.

“We‘ve got to communicate with people that you can’t wait until the last minute to buy flood insurance,” said Brad Kieserman, FEMA’s chief counsel.

(The Associated Press Contributed to this report)

Comments (14)

  • townstra
    Posted on July 12, 2011 at 7:02pm

    A goverment agency that is confused, how could this be?

    Report Post » townstra  
  • e7achh
    Posted on July 12, 2011 at 6:54pm

    If you do not think you need Flood Insurance, you may want to read your Homeowner’s Insurance policy. You may want to go further and ask your Insurance Agent what is covered by your Homeowner’s Insurance policy. Specifically, “what is covered when ANY water gets into my house?” You may be surprised at his/her answer.

    My guess is that anybody with a problem with FEMA Flood Insurance being “welfare” has no idea of what is not covered by their policy and who will cover them. When you basement fills with runoff water from creek that never floods, you may be glad that you checked.

    Report Post »  
  • right
    Posted on July 12, 2011 at 5:57pm

    There has always been a 30 day waiting period for flood ins. Ask the folks in Louisiana that get hit so often by hurricanes. There are few places I’d live without flood ins. If you‘re in an area that doesn’t flood but once every 10 years or so go ahead and take a chance. Save your money and pay for replacement of your stuff yourself or buy flood ins.
    I’m lucky, mine is only a little over $1000 a year. I have NEVER flooded but I’m in an area that may flood.

    Report Post »  
  • SheriS
    Posted on July 12, 2011 at 12:57pm

    FEMA under the Obama administration has become a farce when you have the people of Joplin MO being denied money because their house was livable when the picture shows only a cement block foundation ia all that is left! This happened to most of the homeowners in Joplin! Would not be surpirsed if all the homeowners who have lost everything is this year’s story are also being denied! It seems no one in the South is getting aid from the one organization that can be of assistance! Just proves what a total farce the Obot administration bruly is!

    Report Post »  
  • RodT82721
    Posted on July 12, 2011 at 11:17am

    FEMA Flood insurance should cost enough per policy to cover the cost of replacements and management of the operation. They don’t have to make a profit, but they should cover their costs. It should not be another welfare plan, funded by tax payers. IMHO.

    Typical gov, buying the insurance after the flood. Like buying fire insurance after the house catches fire, then demanding full coverage for a months premium payment.

    Report Post »  
  • Ron_WA
    Posted on July 12, 2011 at 5:09am

    From a general business standpoint offering flood via private insurance is generally too high a risk for the potential profit gain – too hard to get under-writers to assure the potential loss.

    Govt. (thru FEMA) is willing to do sell flood insurance but you can’t buy flood insurance a day or few before an inevitable flood – must buy at least 30 days before date of claim. Makes no sense to sell insurance to someone only after the purchaser knows they will need it – govt. needs people paying into the collective insurance fund for some time beforehand to minimize the cost to taxpayers.

    Every homeowner or purchaser can, & I think in most states is obligated, to review the historical flood plain map prior to home purchase so they should know if they are in a likely flood plain & how much risk they should chose to accept.

    The govt. thru FEMA has been trying to get people to buy flood insurance for decades – watch the TV adds that come around every winter …

    Report Post » Ron_WA  
  • 3katmomma
    Posted on July 12, 2011 at 2:38am

    Excuse me, it is not the farmland that is destroyed during flooding. Unless there are toxic materials in the flood water, as the flood waters recede, nutrients are added to the farmland. Think of your history, and the annual flooding of the Nile River delta.
    It is the destruction of buildings, equipment, and livestock that are the greatest losses.
    My heart goes out to the people having to face the destruction of their property, and then having to face the bureaucracy and stupidity of FEMA, but don’t equate apples with oranges.

    Report Post »  
  • independentvoteril
    Posted on July 12, 2011 at 1:26am

    Here’s reality.. we have been lucky with the MISSISSIPPI so far.. building levies and dams will not change that.. people wanted to plant and live where the river should have been.. they don’t call it the MIGHTY MISSISSIPPI for no reason.. people have been trying to move it for over a century.. digging it out etc.. there was no doubt that someday it would go back where it belongs or do damage to other places..

    Report Post » independentvoteril  
  • dontbotherme
    Posted on July 12, 2011 at 12:01am

    I don‘t know what to say about the insurance company’s policies not covering damages. What I do understand is that thousands of acres of farmland have been destroyed. It will be years till that land can be used for crops again. Do we know where our food supply will come from? The Obama administration destroyed much of the farm lands out west on purpose by shutting off the water supply. What country will we be forced to buy our food from? Or, what government entity will manage our food rationing? Glenn said be prepared. I didn’t listen too well.

    Report Post »  
    • fastfacts
      Posted on July 12, 2011 at 12:39am

      THIS IS ACTUALLY COMING UP IN A HOUSE HEARING

      This subject came up on Saturday about FEMA taking up flood Insurance, article was titled: FEMA faces House heat for taking over flood insurance policies: http://tiny.cc/idyas

      Report Post »  
  • Xplorer
    Posted on July 11, 2011 at 10:30pm

    If a new event occurs, such as a levee break, then your new flood insurance would cover the damage provided you purchased it at least 30 days in advance. The current flooding of the river is considered a flood in progress so damage incurred would not be covered.

    Report Post » Xplorer  
  • AmericanStrega
    Posted on July 11, 2011 at 10:09pm

    Wait, WHAT?

    Report Post »  
    • PeterThePainter
      Posted on July 11, 2011 at 10:54pm

      When is somone going to wakeup. This major flooding of thousands of farm acres was done by the release of massavive waters behind several dams upstream. The environmentalist left want rivers to flow where they will, we are the insurgent upon these lands. Thousands of farm land are gone, I’m sure there will be further regulaions stopping there return. Regulations that will cost so much…insurance, liability…nudge these people out….

      Report Post »  

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