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Flood Insurance Might Not Cover Flooding
WEST BRANCH, IA (CBS2/FOX28) - As Iowa experiences more flooding, more people and homes are at risk of being damaged.
It's enough for insurance agents to say you should pick up flood insurance, but be sure to read the fine print: flood policies do not cover everything.
"All the walls are gone, the carpet's gone, so it's scary. And it's going to be a challenge to get us up back and going again," said Families Inc., executive director Mary Kay Townsend.
Townsend and her staff walked into a floor full of water when they showed to work at their nonprofit social work agency last Tuesday, and have literally been working around the damage.
"I know one of our staff threw away her shoes when she got home because they were ruined," Townsend said.
Almost the entirety of the building will need to be renovated, and Families, Inc. may be able to get $30,000 from a rider on another policy, but it might not be enough to cover everything, Townsend said.
"The scariest part is, we're a nonprofit, and I kiddingly say, 'We take that very seriously,' but in all seriousness, we don't have extra funds," Townsend said.
And homeowners can easily end up in the same situation as Families, Inc. Even if people have flood insurance, they end up self-insuring part of their homes, said Insurance Associates partner Bob Saunders.Policies don't cover floods unless an adjoining property is also hit, and they don't cover basements.
They will pay for a backed up sump pump, "but that wasn't really the problem in this flood. It wasn't sump pumps or drains backing, it was just water comign in so fast it was bleeding through the foundation of your house," Saunders said. "You can't even buy a policy to cover that."
A policy will cover a home above ground in the event of a major flood, and Saunders said, that makes having one worthwhile.
"At least make an intelligent decision. Get a quote, like the lady who called this week, and said, 'For $300, I don't want to run the risk of coming up with, $60, $70, $90, $100,000 dollars worth of flood damage. I would rather spend $300,'" Saunders said.
The law mandates that anyone who takes out a mortgage in a flood plain must have flood insurance, but people can drop their policies as soon as they pay off their home. Saunders told the story of one man who decided to stop his policy just 90 days before the flood of 2008. There was nothing Insurance Associates could do to help pay for the damages, Saunders said.