Keep your home from going down the drain

With Hurricane Irma lurking and more storms surely headed our way, don’t forget the stunning lesson our neighbors in Texas learned during Hurricane Harvey’s flooding.

Most of them apparently will not be covered by their homeowners insurance.

Typical policies have gaping holes that most people — including many of us in Georgia — probably haven’t fully thought about. Nor, I’m sure, do many people realize just how massively creeks and rivers can rise even in a normal hurricane, which Harvey wasn’t.

When it comes to flood insurance, Harvey has re-translated “Buyer beware” to “Beware of not buying.”

So what should those of us who aren’t junior hydrologists do?

I’ll share some tips. But, first, the basics on how the accumulated wealth of our homes can go down the drain quickly:

Homeowners insurance policies don’t typically cover flooding from storms. Sorry.

While federal disaster aid might help, don’t count on it. It’s not automatic, and even when it’s put in place, it won’t cover a lot of what many homeowners have lost. Sorry again.

You typically can get separate flood insurance policies whether or not your home is in a likely flood zone. Not all of it is super expensive.

But even regular flood insurance policies backed by the federal government may not cover you completely. The maximum payout is typically $250,000 for the dwelling and another $100K for the contents. And some important items won’t be covered. For example, there are limits on what gets covered in a basement that is fully below ground.

Thinking of buying last-minute flood insurance to cover your home before Irma hits? Sorry again. In most cases there’s a 30-day wait period between the time you pay your first premium and the time you get protection from federally backed policies.

Don’t use that as an excuse to procrastinate. Homes are often the biggest financial investment Americans have.

In the Houston area hit hard by Harvey, 81 percent of homeowners did not have flood insurance, said Harsha Agadi, the CEO of Georgia-based Crawford & Company, which sends out adjusters to help major insurers.

“If you don’t have flood insurance, now is the time to think about it,” Gregory Baecher told me. He’s a University of Maryland civil engineering professor who studies flooding impacts.

Flood insurance can set you back a few hundred dollars a year. So it’s conceivable you could spend $10,000 over 20 years on flood insurance to protect $350,000 of value and

sleep better at night. For some properties, flood insurance can cost significantly more.

How do you determine what your risk is?

Start by knowing where potential hazards are nearby. Where are the closest creeks, lakes and stormwater runoff areas? How high have they gotten in the worst of past storms?

Check Federal Emergency Management Agency maps showing flood zones (called FIRMS, Flood Insurance Rate Maps). The state of Georgia shows them online at http://map.georgiadfirm.com.

On the site, type in an address and then click on “View FIRM panel.” Locate your property and for blue/ green borders indicating “special flood hazard areas subject to inundation by the 1 percent annual chance flood,” which used to be called the 100-year floodplains.

Baecher suggested that if your property is outside those zones, but relatively close by, it may be worth buying flood insurance.

“Elevation is king,” he said. The higher your property is above the level of the floodplain, the better.

But here’s a crucial caveat: FEMA’s flood maps are imperfect. The risk of floods keeps changing. Buildings and parking lots built upstream will restrict water from soaking into the ground and likely increase flooding downstream.

There’s also widespread concern that volatile weather is becoming more common. Hurricane Harvey wasn’t normal. It dumped more than 50 inches of rain in some places.

“It is outside our normal insurance planning,” Baecher said. “Despite what critics say, this is going to happen more and more.”

If you have an insurance agent, seek their advice on flood insurance, said Jim Dwane, a former Southeast regional president for AIG’s property and casualty insurance business.

Read what’s covered — and not covered — under your existing insurance policies, Dwane said. “At the end of the day, it’s about personal responsibility.”