Commissioner Donelon kicks off Storm Tour, urging consumers to protect their property with flood insurance

May 25, 2010

At a press conference today, Insurance Commissioner Jim Donelon kicked off his summer storm tour aimed at raising awareness for hurricane and flood preparedness. Experts are predicting an “above average” 2010 Atlantic hurricane season and Commissioner Donelon is imploring consumers to protect themselves and their property against Louisiana’s most frequent and unpredictable natural disasters – hurricanes and floods. “Despite last year’s relatively calm hurricane season, Louisiana knows the power a hurricane like Gustav, Rita, or Katrina can have,” said Commissioner Donelon. “It is critical that the people of our state protect themselves with flood insurance.” Colorado State University’s Tropical Meteorology Project forecasters predict that 15 named storms will form during this hurricane season. Of those 15, eight are expected to grow into hurricanes, with four becoming intense hurricanes, which are Category 3 storms like Rita and Katrina with sustained winds of at least 111 mph. The Atlantic hurricane season runs June 1 through November 30.

“Currently, only 29 percent of the state’s households have flood insurance. It is imperative that our residents take action to guard against this risk,” Commissioner Donelon said. Flood insurance backed by FEMA’s National Flood Insurance Program (NFIP) provides home owners, business owners and renters with the best protection available against flooding. Only 483,966 out of 1.6 million households in Louisiana currently have flood insurance.

Hurricane Gustav caused over $2 billion in paid, insured property damage claims in Louisiana, which includes $92 million in flood claims. Hurricane Ike caused $406 million in insured property damage claims, including $309 million in flood claims. Hurricane Katrina caused $13.2 billion in flood claims with the average claim being $95,000. Hurricane Rita caused $207 million in flood claims with an average claim of $64,000.

Residents should be aware of their flood risk and take steps before the next storm to protect their home and/or business from potential flood damage. Standard homeowners insurance does not typically cover flood damage, but flood insurance covers that damage that residents would otherwise have to pay for themselves.

However, keep in mind that the NFIP policy does not provide coverage in excess of $250,000 for your house and $100,000 for its contents. If you need more coverage, you can purchase excess flood insurance through private insurers.

Although storm surge caused by hurricanes and tropical storms can wreak havoc on coastal areas, some of the most damaging floods occur hundreds of miles from the shoreline, days after the storm’s initial landfall. As hurricanes and tropical storms move inland, torrential rains and high winds intensify the risks of flooding by rivers and streams. In fact, rains associated with Hurricane Gustav caused extensive flooding in areas as far north as Alexandria and Monroe.

The risk of hurricanes and related flooding includes the Gulf Coast and entire Eastern seaboard. Many scientists predict warmer waters in the Atlantic will be fuel for stronger hurricanes over the next 15 to 20 years – and storm surge can be a major factor for coastal areas. Flood insurance covers flooding from tidal and storm surge where other policies may not.

Contact your insurance agent who can assist consumers in obtaining NFIP policies to cover homeowners, renters and business owners. The average flood insurance policy premium is around $500 a year. However, if your property is located in a low- to moderate-risk flood zone, you may be eligible for a low-cost Preferred Risk Policy, which can start as low as $119 a year. Remember, most policies take 30 days to go into effect, so don’t wait until a storm is coming to purchase flood insurance.

Individuals can learn more about their flood risk by visiting www.ldi.state.la.us, or calling our nationwide toll-free number, 1-800-259-5300. Residents can also visit www.FloodSmart.gov or call 1-800-427-2419 for more information about flood risk and the benefits of purchasing a flood insurance policy. Another source of great tips on preparing for hurricanes is the Louisiana Governor’s Office of Emergency Preparedness’ “Get a Game Plan” Web site found at www.getagameplan.org.

Be Floodsmart – Reduce your Risk

• Learn your flood risk. Properties that are not located in high-risk areas can also flood. Find out your flood risk right now by entering your address at www.FloodSmart.gov “Assess Your Risk.” Your insurance agent can also help you check your risk.

• Plan for evacuation. Plan a flood evacuation route, ask someone out of state to be your “family contact” in an emergency, and ensure everyone knows the contact’s address and phone number.

• Move important objects and papers to a safe place. Store your valuables where they will not get damaged in a flood.

• Conduct a thorough home inventory. Thorough documentation of your belongings will help you file your flood insurance claim. For more information, visit www.knowyourstuff.org.

• Build an emergency supply kit. Food, bottled water, first aid supplies, medicines, and a battery-operated radio should be ready to go when you are. Visit www.ready.gov for a disaster supply checklist.

• Purchase a flood insurance policy. Most homeowners insurance does not cover floods and there may be a 30-day wait before a flood policy becomes effective. If you already have a flood policy, remember that your policy needs to be renewed each year.

Historic NFIP Claims in Louisiana

Event
5/3/78
4/13/80
Juan – 10/26/85
5/8/95
Katrina-8/29/05
Rita – 9/23/05
Gustav – 9/1/08
Ike – 9/11/08

Total Claims
7,284
12,316

5,942

31,264

138,373

3,222

3,391

7,275

Total Paid
$ 43,288,709
$ 84,159,449

$ 89,331,260

$584,140,014

$13,203,787,951

$207,241,537

$ 92,358,176

$309,818,168

Average Paid
$ 5,964
$ 6,833

$15,034

$18,684

$95,423

$64,321

$27,236

$42,587

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