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Sunday, June 15, 2008

Ind. Law - "Misinformation about flood insurance leaves some with nothing"

That is the headline to a lengthy story today in the Terre Haute Tribune Star that begins:

TERRE HAUTE — When Denise Hutcheson tried to buy flood insurance for her home at 1433 S. Fruitridge Ave. last year, she was told she couldn’t because she didn’t live in a flood plain.

That incorrect information has cost her dearly. Because of last weekend’s severe rain and flooding, Hutcheson lost many possessions, and her home is now uninhabitable.

“My agent denied me flood insurance because I was not in a flood plain,” she said.

Read in conjunction with this June 11th WTHR Indianapolis report by Rich Van Wyk headed "Misconceptions about flood insurance." Some quotes:
The tragic misconceptions over flood insurance extend to government, including the mayor of Columbus.

"They weren't in flood plain; they have no flood insurance," said Mayor Fred Armstrong.

"I talked to several families who talked or applied for flood insurance to be told they didn't need it or it wasn't available," said Gov. Mitch Daniels. * * *

The state is trying to get the word out, end the misconceptions and encourage more people to purchase flood insurance. It's requiring insurance agents to receive additional training on flood insurance.

Residents in 33 communities can't buy national flood insurance, because they haven't met federal requirements.

Well, that story ends on a confusing note. It is perhaps cleared up in the Tribune Star story:
The fact is, anyone can buy federal flood insurance as long as they live in a community that participates in the National Flood Insurance Program, according to the Federal Emergency Management Agency Web site.

Jeremy Weir, executive director of the Vigo County Area Planning Department, agreed there appears to be a lot of misinformation in the community with regard to flood insurance. To participate, a community must follow FEMA flood plain management guidelines, he said.

“We have a flood plain ordinance and we also do public outreach,” he said. Among other ordinance requirements, new construction in a flood plain must be elevated.

When communities participate, FEMA does require reasonable mitigation of flood risks including construction and maintenance of levees to FEMA specifications, restrictions on building in flood hazard areas and maintenance of drainage ways, said Scott Rusk, a real estate appraiser who has dealt with flood insurance for the past 16 years as part of the appraisal process.

He’s concerned about the misinformation that exists as well.

“I shudder to think of how many people asked about flood insurance and were told by their agents that they could not get flood insurance, but actually could have been insured and now have lost everything because their agent was either misinformed, or just too lazy to do the paperwork for the small commission,” Rusk said.

Here is the FEMA list of Indiana communities participating in the National Flood Program. Here is the main FEMA flood information page.

Posted by Marcia Oddi on June 15, 2008 01:36 PM
Posted to Indiana Law