Why doesn't homeowners insurance cover flood damage?
The remnants of Hurricane Nicholas are drenching
There has been a lot of flooding over the past couple of weeks from the
Why is that?
Basic homeowners insurance policies haven't covered flood damage for decades now.
"If you went back to the '40s and '50s and '60s, there was a string of flood disasters that were quite costly," said
In 1968, the federal government stepped in and created the National Flood Insurance Program.
Since then, according to
"After the 1994 earthquake in
After a number of storms in
"This issue of insurers having said in the '60s, 'OK, we're out,' and the federal government having said, 'We're in,' is a pattern now that has repeated over and over," Bach said.
Homeowners don't always realize that their regular insurance doesn't cover flooding, and most people who buy policies through the National Flood Insurance Program live in high-risk areas - which isn't great for the program.
"The program's
"For example, there's a group of properties that flood repeatedly, and the program keeps paying to rebuild them," Kousky said.
That, she said, doesn't make a whole lot of economic sense.
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