Flood insurance changes coming
Lynda DeRigge of Palomino Manor in Southport can't recall ever having a flooding problem in her neighborhood.
When she bought her house five years ago, her mortgage lender mistakenly said she didn't need flood insurance, DeRigge said.
But when she went back to the same lender for a home equity loan a few years later, a background check revealed the oversight, and she was told she did need flood coverage.
"They say I need it, but I don't think it's ever flooded. In '72, it didn't flood here," DeRigge said.
"I'm stuck, so I'll just do it," she said.
It was 34 years ago that the remnants of Hurricane Agnes swamped the Twin Tiers.
Even though flooding is always a threat in our region, only a small percentage of residents are required to buy flood insurance.
That might soon change as Congress looks for ways to bolster the nearly bankrupt National Flood Insurance Program.
Among the options lawmakers will look at are increasing the already pricey premiums and requiring more people to enroll in the program.
As it is, some local people are disillusioned with the system. They found out after paying into it that the insurance doesn't cover everything they think it does.
Rules may change
Congress established the National Flood Insurance Program several years ago after most private insurance companies dropped flood coverage from their homeowners policies because claims were getting too costly.
The program is administered through the Federal Emergency Management Agency. Property owners can buy the insurance through any of 96 private insurance companies that service the policies for the government, said Butch Kinerney, FEMA mitigation specialist.
FEMA and Congress have always honored their obligation to policy holders, but the program really took its licks in 2005 with the active hurricane season, Kinerney said.
"Last year was a catastrophic year for us. In a normal year we settled 15,000 claims. Last year, we had 250,000 claims," he said.
"We did have to borrow money. Congress made it clear they wanted all eligible claims paid. Do we keep borrowing or start from scratch? That's something Congress has to work out."
Through the National Flood Insurance Program, FEMA identifies and maps the nation's flood plains.
Residents in communities that adopt and enforce flood plain management ordinances to reduce future flood damage can receive discounts on their premiums.
Federal law requires anyone who lives in a flood plain to buy flood insurance before they can take out a home mortgage.
Many people don't realize their homeowner's insurance policy doesn't cover flood damage, said Marianne Kalec, vice president and mortgage department manager at Chemung Canal Trust Co.
"People will say they have homeowner's insurance. You have to tell them flood is different. People don't understand that," Kalec said.
"We have to check everybody. You never know. By law we have to. That's hard to explain to somebody, especially if they are up on a hill."
Only 3 percent of Chemung Canal mortgage holders carry flood insurance, Kalec said.
Nationally, 4.9 million flood insurance policies are in effect, Kinerney said.
If you don't live in a flood zone, carrying flood insurance is a personal choice, and home owners have to weigh the costs and benefits, just as they would with any other type of insurance, he said.
"I don't have flood insurance on my house. I look at my risk. I live on a pretty high hill," said Kinerney, who lives in Maryland. "I'm not as at high risk. It is something I should consider.
"When you live in a hilly area, such as (the Twin Tiers), you've got lots of steep hills and valleys. Flood insurance is something to look into. You can have flood damage even if you live a fair distance away from a river," he said.
"Areas that experience rapid development, they need to be conscientious of how water runoff is changing. Every time you put up a Home Depot, put up a Wal-Mart, cut down a forest and put in a parking lot, you change the way water moves."
Raising public awareness
Several local insurance agents provide flood insurance, but there isn't a high demand for the coverage, said Kevin Hooey of Callahan & Hooey Insurance and Real Estate in Corning.
"Honestly, very few purchase it unless required by a financial institution," Hooey said.
"We've seen what a flood can do, which is why we still carry the coverage on our office on Pulteney Street in Corning.
"Certainly, we discuss flood insurance with our clients. For many, the floods of 1972 and 1975 are ancient history," he said. " 'The Tioga-Hammond dams are supposed to take care of any future flood concerns' is a statement I hear quite often. Many financial institutions think differently, however."
Peter Wallin, owner of the Wallin Insurance Agency in Elmira, said the trend in recent years has been to discuss flood insurance options with people even if they don't live in a flood plain.
"In years past, we never suggested it. Now we are seeing insurance companies coming down on us, saying you should suggest it to all your customers," Wallin said.
"A lot of people don't realize that flood is not part of the regular policy. There is a peace of mind if you do have it."
Flood insurance in general is more expensive than homeowner's insurance because there is a smaller pool of policy holders to draw from.
Otherwise, insurance costs vary based on the same risk assessment factors that go into other insurance coverages, Kinerney said.
"It's $150 a year up to $1,100 outside a flood zone. If you're inside a flood zone, the cost is $300 to $2,000 a year," he said.
Leaks in the system
Flood insurance may be expensive, but the federal government is good about paying claims, Kinerney said.
But that isn't always the case, said Michael S. Smith, Chemung County's director of fire and emergency services.
Smith, who is DeRigge's brother, said he recalls an instance when flood insurance wouldn't cover damage because the flood waters came from a creek rather than the Chemung River.
"In 1994, a tropical storm flooded a lot of properties in Webb Mills and Ashland. The flood program refused to pay. They said this is not riverine (related to a river) flooding," Smith said.
"The National Flood Insurance Program providers didn't have any reluctance to take these folks' premium dollars. I raised a fit. I said that's the most ridiculous thing I've ever heard. You're not going to pay because it came from a creek, not the river?"
Bill Baker of Hickory Lane in Pine City found another gap in coverage.
Baker bought flood insurance after the 1972 Agnes flood, but when his basement filled up in a January 1996 flood, he found out some kinds of unwelcome water aren't covered.
"Flood insurance doesn't cover groundwater. Water has to come through windows and has to be muddy. That's what I was told," Baker said.
"So there's no use me having flood insurance. To me, it's a waste of money. We got nothing. So I wasted thousands of dollars. It's about $700 a year for that insurance. So no sir, I will not take out flood insurance."
In the meantime, Lynda DeRigge keeps paying her premiums, even though she's pretty sure she will never need the protection.
"My problem with paying it is that there is water here but it's ground water and a lot of these houses have sump pumps. If it rains your pump will be running," she said.
"Flood insurance won't pay for that. It only pays if you are flooded by an overflowing stream. I don't think that's going to happen."
But that sort of attitude is too shortsighted, said Kinerney, who said people rarely expect to be the victims of natural disaster.
"Agnes was an extraordinary event," he said. "When it does happen, it can be catastrophic financially for a family."