Romano: You better hope I’m wrong about flood insurance

Residential neighborhoods near the Interstate 10 sit in floodwater in the wake of Hurricane Harvey in Houston last August. It is estimated that 70 percent of the homes damaged by water did not have flood insurance. [Marcus Yam/Los Angeles Times]
Residential neighborhoods near the Interstate 10 sit in floodwater in the wake of Hurricane Harvey in Houston last August. It is estimated that 70 percent of the homes damaged by water did not have flood insurance. [Marcus Yam/Los Angeles Times]
Published June 22 2018
Updated June 22 2018

Chances are, I’ll go down as the Boy Who Cried Flood.

You might have noticed, I’ve been shouting about the imminent calamity of flood waters for quite a few years now. If I wasn’t trying to frighten you into buying flood insurance, I was worrying you about the potential collapse of that industry.

And, I’m pleased to say, I’ve never been proven right. We’ve avoided a catastrophic flood, and the National Flood Insurance Program continues to provide roughly 220,000 policies in the Tampa Bay area.

So call me an alarmist. A crackpot. A hysterical doofus vying for your attention.

But, before you do, you might want to consider these 10 numbers.

37 — That’s how many days remain before the National Flood Insurance Program (NFIP) expires. That doesn’t mean existing policies won’t remain in effect, but it does mean the government will not renew or write new policies if the program is not extended. Congress has always saved the NFIP in the past, but this is the first time it is not tied to a budget extension. In other words, a program forced to borrow $36 billion in the last 13 years, must now make a case to live or die on its own.

40,000 — The number of home sales that will collapse each month if the NFIP is not renewed, according to the National Association of Realtors. No NFIP usually means no mortgage in high-risk zones. If that happens, it could affect home values in the entire market.

8 — Of the 10 most destructive storms in the last 40 years, eight have occurred since 2001. That could be coincidental. Or it could be because we’ve allowed developers to overbuild without considering flood implications. Or maybe because, as the National Center for Environmental Information has reported, hurricanes have been stalling over one location and causing historic rainfall. Whatever the reason, you’re not wrong if you have the sense that floods have been getting worse.

70 — Percentage of homes damaged by Hurricane Harvey near Houston last year that did NOT have flood insurance, according to an analysis by financial services provider CoreLogic. The percentage of uninsured homes during a devastating flood in Baton Rouge, La. the year before was even higher. Just because you’re not in a zone that requires insurance doesn’t mean you don’t need insurance.

$32,650 — That’s the difference, in median household income, between homeowners in flood zones who carry insurance and those who don’t in Florida. The average policyholder has a median income of $76,112. The average non-policyholder is at $43,462. Get it? This isn’t an issue of millionaires on the beach. The problem is lower-income and fixed-income families who can’t afford increasing premiums.

$112,964 — The average paid claim by the NFIP for Hurricane Harvey in Texas. Now imagine not having any flood insurance.

13 — Cents on the dollar that NFIP customers in Florida are getting back in claims, according to the consumer spending company ValuePenguin.com. Florida has, by far, spent more on premiums than any other state and yet has received less in claims historically than Louisiana, Texas, New York and New Jersey. Keep that in mind as congressional leaders argue to raise rates next month.

$134,773,178 — Paid out by the NFIP to residents in Pasco County since 1978. Think about that. Pasco is not a major beach destination and has had no direct hurricane hit. Kind of makes a $450 policy in a moderate-risk flood zone sound worthwhile.

8 — Percent was the average price increase for NFIP policies in 2018. The Congressional Budget Office says, however, NFIP premiums are still falling short by $1.4 billion annually. One way to spread the risk is to more accurately chart high-risk zones. Otherwise, current policyholders will continue seeing higher rates to absorb that $1.4 billion shortfall.

1 — Major storm. That’s all it takes.

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