An estimated 75% of those affected by the weekend’s catastrophic floods do not have flood insurance, according to Louisiana Commissioner of Insurance Jim Donelon.
Though it’s way too early to tell how many Louisiana property owners have been affected by the floods or how much their losses will total, on average only about 25% of the state’s property owners will be able to recoup their losses under the federally subsidized National Flood Insurance Program, Donelon says.
“I’m willing to bet about one-fourth of those affected will be insured and three-fourths won’t,” he says. “Unfortunately, there is nothing they can do about it at this point.”
Donelon says the number of small business owners with flood insurance is likely a little higher than the statewide average, but not by much. He estimates about 30% of business owners are insured against flood damage.
Ironically, Donelon’s office issued a seasonal reminder late last week that property owners should avail themselves of the National Flood Insurance Program, which costs, on average, about $60 per month. The release noted that after hurricanes Katrina and Rita, flood insurance policies in the state increased more than 30% to some 500,000. In recent years, however, the numbers have decreased and currently there are an estimated 450,000 policies in the state.
“I tell folks the best insurance buy a Louisiana property owner can make is the significantly subsidized flood insurance program,” he says. “But we have a lot of working poor in Louisiana and people invariably roll the dice.”
Late Sunday, Gov. John Bel Edwards said President Barack Obama has declared several affected parishes to be major disaster areas, a federal designation that will make it easier for flood victims to receive disaster aid.
Edwards said FEMA will make available up to $33,000 per household under the program. In many cases, however, that cash assistance goes to pay for rent, temporary housing and some home repairs, and doesn’t begin to cover losses from flood damage. Flood victims will also be eligible for low interest loans through the Small Business Administration.
Still, Donelon says it’s highly unlikely the area will see the kind of large-scale federal aid that materialized after hurricanes Katrina and Rita and funded the Road Home Program.
“That was the rare exception,” he says. “Even after Superstorm Sandy the federal government didn’t step up with that kind of aid.”