Friday, September 25, 2009

More than 16,000 flood-related claims filed in Atlanta area

morethan insurance

As the waters recede, the insurance claims pile up.

Based roughly on claims tallied so far by the state’s largest home insurer, more than 14,000 claims have been filed on homes damaged by the recent flooding, while 2,000 have been filed for harm to water-damaged vehicles.

Many claims are still to come, said David Colmans, executive director of the Georgia Insurance Information Service. “They need to get the debris cleared up, and they need to get water out of there.”

And more bad news awaits homeowners and renters.

“A lot of this is not going to be covered,” Colmans said. “The insured damage is going to be significantly less than the total damage.”

Flood insurance is sold by companies but is part of a Federal Emergency Management Agency program, which sets the rates. A policy covers up to $250,000 in damage for the contents of a home and $500,000 for the building itself.

Those with higher-cost homes and belongings are free to purchase policies from “specialty insurers,” said Colmans. “This is for those who have high-end risks and are willing to pay the premiums.”

Processing the thousands of claims will take at least several weeks, and when the paperwork is done, most homeowners and renters will be disappointed to find that they must bear the costs of flood damage themselves, Colmans said. Why? Because official maps may be wrong about flooding risks, because homeowners evaded — or didn’t know — the legal requirements to have insurance or perhaps because they simply underestimated the chances of a flood.

The impact of the storms on some DeKalb County residents’ lives was obvious at an emergency informational meeting Wednesday night at the county’s Lou Walker Senior Center near Lithonia.

When the water started pouring into Sandra Jinks’ house Monday evening, she knew what to do. She grabbed the television and some shoes and fled upstairs.

Now that the waters have receded, leaving the first floor of her house a smelly wreck, her next steps are not so certain.

Jinks is living upstairs, and she knows she must soon fix the damage below. But, like so many others hit by this deluge, she didn’t buy flood insurance.

“I’m trying to get some help,” said Jinks, who lives off Thompson Mill Road in south DeKalb County. “I can’t afford to fix it.”

Jinks was among nearly 200 people who attended the meeting coordinated by DeKalb County Commissioner Lee May. As with Jinks, the first floor of his house was submerged by the storm. And like her, May had no flood insurance. When he asked how many in the room also didn’t carry coverage, nearly everyone raised their hands.

So, what happens next?

Those without coverage can look to the government for help.

If the flooded region is declared a disaster area, FEMA could provide loans, as well as money for basic repairs and perhaps to replace homes that are effectively destroyed.

No word on a disaster declaration had come as of Wednesday evening. But after a helicopter tour of the affected area Tuesday, state Insurance Commissioner John Oxendine estimated the damage from the flood at more than $250 million.

DeKalb officials held out hope for federal aid. The county is manning two phones around the clock until Friday at its emergency operations center — 678-406-7850 or 678-406-7853 — so people can both call for help and report damage. “The numbers are important when it comes to a declaration” of a federal emergency, said Craig Medlin, the deputy chief of the county’s Office of Emergency Management.

Mercedes Bell isn’t waiting for help. By Wednesday, she’d already stripped out her carpets and torn out the soiled drywall, and a dehumidifier had already blown out most of the moisture, Bell said.

Her neighbor, who buys old houses and fixes them up, pitched in to help her. So did friends.

Experts say it’s important to dry out your house within two days of a flood to avoid mold contamination, so Bell may well have avoided the worst.

“A lot of my friends have been really, really lovely,” said Bell, who lives off Stephenson Road in south DeKalb. “We can fix mine because we caught it so quickly,” she said, adding, “It’s definitely going to be a struggle until my next paycheck.”

For many other storm victims, high water made it hard or impossible to even examine the damage. But by mid-Wednesday, more than 3,500 claims had been filed with State Farm Insurance, whose clients represent about one-quarter of the homes and autos in Georgia.

Although no official count will be available for some time, that number does provide a guide to the claims thus far, said Oxendine. “You can probably just multiply that by four.”

Flood insurance is mandatory for homes in a flood plain. In other areas, it is voluntary.

But even where it is legally required, homes are often without it, said Robert Klein, professor of risk and insurance at Georgia State University.

The requirement is generally enforced through lenders, who will not provide a mortgage to someone in a flood zone without purchase of flood insurance. But some homeowners do not have a mortgage at all: They paid off the mortgage, or inherited their houses; they financed the purchase themselves or bought them with cash.

Moreover, the maps that set out those high-risk areas are “woefully inadequate,” he said.

Maps should be recalibrated to account for continued development and sprawl, he said: destruction of trees, paving of roads and parking lots, addition of new homes to older areas and landscaping all change the way water drains — or doesn’t drain.

And where there are storm drains, if they are not kept clear, the water can pour onto land where there should be no flooding, Klein said.

It adds up to higher odds of flooding, he said. “People are at a much higher risk than they have been told.”