dagblog - Comments for "Caveat Emptor: What Flood Victims Should Anticipate"

I just love the fact that

RobbyLove — Tue, 17 Jun 2008 21:48:18 +0000

In reply to Caveat Emptor: What Flood Victims Should Anticipate

I just love the fact that insurance companies jack up their premiums for flood / tornado / hurricane / earthquake coverage, then when one of these disasters hits they go running to the government for bankruptcy protection because they can't pay off all the claims.

So not only does the consumer get raped on their premiums, they get raped when their taxes pay for their own insurance claims.

My God, what an absolute SCAM the insurance industry is.

Further notes for flood

wwstaebler — Tue, 17 Jun 2008 20:27:38 +0000

In reply to Caveat Emptor: What Flood Victims Should Anticipate

Further notes for flood victims:
1) Keep in mind that most houses that are catastrophically water-damaged and which remain empty (if boarded-up) for a year or more will have to be torn down due to deteriorating structural issues and irreversible infiltration of molds. Even if you finally receive some insurance re-imbursement and want to risk renovation, if FEMA and/or the county health department "condemned" it, as part of a post-storm survey, you have no recourse. So, off the top, you will have to subtract $12-20K from your payout for demolition, or face escalating fines for non-compliance from the county plus the cost of demolition. (Costs are high because you can only use a licensed demo company officially approved by the county -- no short-cuts allowed.)
2) Be aware that your credit rating may be affected, negatively -- even if you have a great history and continue to make all your payments, every month. That is because your property will be re-appraised by the mortgage company and significantly devalued, at the same time your expenses are doubled or tripled; therefore, your debt to asset ratio may be thrown into a higher risk category.
3) The mortgage company may then try to coerce you into a complete payoff, or, announce that, from now on, you are required to pay a higher rate of interest -- even on a fixed rate loan. (You can fight this and win, but it is a tough fight with lots of bureaucracy to overcome, repeatedly.)
4) Ditto for credit card companies, who will raise your interest rate even if you have paid on the nose for years. This, too, is a fight you can win, but you have to fight it, and pay the higher rate in the interim.
Natural disasters plus opportunistic bureaucracy: the gift that keeps on giving.
5) Accept that you will not be able to sell your property, even as a building lot, for a very long time. Even in a strong market, the inventory of properties for sale after a natural disaster will be glutted and it will take years for that surplus inventory to be re-absorbed.

Great post. Although it's

clearthinker — Tue, 17 Jun 2008 05:18:29 +0000

In reply to Caveat Emptor: What Flood Victims Should Anticipate

Great post. Although it's specific, it deals with a greater issue:

"Hi! We're here from the government... and we want to help!"

Want to see more madness? The Dept of Homeland Security -- which is strapped for cash, believe it or not -- does this with taxpayer dollars:

http://www.albuquerquebaseball.com/schedule/promos/index.html?date=2008-4-20

Thanks, LisB. We all have our

wwstaebler — Tue, 17 Jun 2008 04:33:37 +0000

In reply to Caveat Emptor: What Flood Victims Should Anticipate

Thanks, LisB. We all have our mettle tests. This was one of mine. I read about one of yours and felt humbled by your selfless clear thinking.

My wind/structure/household

wwstaebler — Tue, 17 Jun 2008 04:04:30 +0000

In reply to Caveat Emptor: What Flood Victims Should Anticipate

My wind/structure/household contents insurer declared "insolvency" three days after the hurricane, which automatically put my claim into the state pool, which immedidately announced (really because they had to -- given their fund versus the nunmber of claims) that no monies would be paid for personal possessions/household goods. My original policy called for $175K in household goods with a fine arts rider (OK I stretched it). My premiums were paid. In the event, didn't matter. You can't argue with a state agency.
BTW, if it had not been for a very kind man from the state agency, who just happened to show up,without prior notice, a year after the storm on a blistering July day when I happebed to be back at my ruined house to purge the remaining remnants, I might well still be unpaid. Seeing me there, sweating bullets, still trying a year later, evoked his personal conscience. Not only did he promptly approve my state pool payment, he also sent a censurious email, with a JPEG of the water line and black mold attached, to Lloyds of London; it it, he asked them why they had not paid my claim, when the proof was before them. Two months later, they offered me 70%, which I accepted.

Thanks, LisB. Fortunately, I

burnedoutdem — Tue, 17 Jun 2008 03:25:33 +0000

In reply to Caveat Emptor: What Flood Victims Should Anticipate

Thanks, LisB. Fortunately, I don't *need* this info just now, but I was trying to understand what people will face.

Additionally, wwstaebler, you mentioned that often when they pay out possessions are excluded. Is that even if your policy is for structure and contents? I'm about to buy a policy and am trying to decide if it's worth the extra premium if they won't pay out in the end.

Oh, I'm glad you made this

burnedoutdem — Tue, 17 Jun 2008 03:22:34 +0000

In reply to Caveat Emptor: What Flood Victims Should Anticipate

Oh, I'm glad you made this into a separate post - it was a great comment on my post, and I was sad to see it slip into the unknowns. Thank you for your explanation - twice! :)

Well, that was depressing.

kgb999 — Tue, 17 Jun 2008 03:20:48 +0000

In reply to Caveat Emptor: What Flood Victims Should Anticipate

Well, that was depressing. Very useful, but depressing.

Thanks for posting this.

LisB — Tue, 17 Jun 2008 02:28:43 +0000

In reply to Caveat Emptor: What Flood Victims Should Anticipate

Thanks for posting this. Earlier today burnedoutdem was asking about flood insurance and FEMA. I hope burnedoutdem sees this post, because it's important and has some very real answers.

Sorry you came to learn about these very real answers the hard way, wwstaebler.

Recommended. People should know about this.

I have recommended my own

wwstaebler — Tue, 17 Jun 2008 01:57:22 +0000

In reply to Caveat Emptor: What Flood Victims Should Anticipate

I have recommended my own post because flood victims have a "need to know." I have former neighbors, who held out for a payment in full, who have not been paid anything, to date, four years later.