OPINION: Thousands of local homeowners continue flirting with disaster

Jun. 16--A front-page story in today's paper indicates thousands of locals are still flirting with disaster.

It focuses on an annual report by CoreLogic, a global property research company, that shows 74,181 homes in Terrebonne and Lafourche parishes are at risk of flooding from hurricane storm surges. Combined, the homes would cost an estimated $15.8 billion to rebuild.

Match the numbers with other data and the picture grows bleaker.

As of Sept. 30, the latest figures immediately available from FEMA, the National Flood Insurance Program covered nearly 29,000 homes in Terrebonne and Lafourche with a combined value of roughly $8 billion.

Based on the data, if a major storm surge hit Terrebonne and Lafourche, owners of more than 45,000 homes without flood insurance could face having to come up with most of the money to rebuild. It shows owners have left nearly $8 billion combined home-replacement costs uninsured in against flooding.

This would be shocking if we hadn't heard the same story last year. One of the few differences this year is that the total number of at-risk homes has risen by more than 2,500, and the cost to rebuild them is up by $1.3 billion.

So what does all this mean?

Same thing it meant when I wrote about the same problem last year.

It means thousands of local homeowners will lack the tens of thousands of dollars they'll need to rebuild if a hurricane storm surge, or any flood, causes widespread damage.

No problem, you say? You'll just wait for a bailout from some federal program that will sprinkle money around after the disaster.

That's highly unlikely, the financial website ValuePenguin reports.

"Data shows a significant portion of homeowners may be banking on federal flood relief they'll never receive," it says in a June 29 article on its website.

If you lack flood insurance, here's what you can expect:

"The maximum direct assistance FEMA will pay is $33,000, which sounds like a lot of money, but not if you have a significant flooding event," Michael Barry of the Insurance Information Institute told ValuePenguin. "And while the maximum claim amount is $33,000, the average payout is closer to $10,000."

Compare that to the average flood insurance claim in 2016 -- $62,247.

"What ends up happening for most of those uninsured losses is that people get loans at a below-market interest rate," Louisiana Insurance Commissioner Jim Donelon told The Courier and Daily Comet in 2017. "That, in effect, sucks all the equity out of their homes. For a typical family, their biggest investment or asset is their home."

The same story revealed about 34 percent of homes in Terrebonne and 29 percent in Lafourche were insured against floods, figures that showed some of the steepest declines among Louisiana parishes over the previous five years.

This, despite living in a place where hurricanes pose a major threat six months of every year, where heavy rain can swamp streets and homes, where the Gulf of Mexico inches inland as land erodes and seas rise, and where officials have long advised every resident to have flood insurance.

Flood insurance costs can vary greatly depending on your home's risk. The average policy costs $583 a year in the Houma city limits and $619 in unincorporated areas of Lafourche, according to ValuePenguin's latest data. FEMA estimated the average cost in both Terrebonne and Lafourche at under $700 a year in 2017, and it has not risen much since.

The median home's value, meanwhile, is about $144,000 in both parishes.

Sure, some people can't afford to buy flood insurance. But far more people can't afford not to.

-- Executive Editor Keith Magill can be reached at 857-2201 or keith.magill@houmatoday.com. Follow him on Twitter @CourierEditor.

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