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Hurricane season: All you need to know about flood, wind insurance

By Gabe Semenza
June 28, 2010 at 1:28 a.m.


WHAT IS A FLOOD?

A flood by federal standards is deemed a single contiguous body of water that affects two or more properties or, as in the instance of a country home, covers two acres or more. Flood insurance does not cover, for example, damage caused by flooding from a garden hose.

As Tropical Storm Alex blows toward Texas, many area homeowners bombard insurance agents with questions about coverage.

Does my policy cover hurricanes? Did you receive my last payment? Can I still buy insurance?

"Some people have been caught unprepared and thought they would have that last minute to buy insurance and hedge their bets," Russell Janecka, owner of Janecka Insurance, said. "For those people, it's a very risky proposition."

FLOOD INSURANCE

Most typical homeowners' insurance policies cover risks such as windstorm, fire and hail. While some policies cover damage from busted water pipes and roof leaks, none protect against flooding.

A flood by federal standards is a single contiguous body of water that affects two or more properties or, as in the instance of a country home, covers two acres or more.

"Flood insurance is a separate policy not covered under a homeowner's policy," said Scott Martin, owner of Martin & Martin Insurance. "A flood is strictly rising water, whether it's from a river, a storm surge or heavy rains. There may be a few restricted areas where it might not be available, but for the most part people should have no problems with getting flood insurance."

Those who lack flood insurance cannot secure it now, however. Once a tropical storm or hurricane enters the Gulf of Mexico, new policies cease.

This reality catches many people unprotected. Hurricanes, as South Texans know, often dump loads of rain and fill rivers to the brim.

When the Gulf is free of storms, flood insurance is typically available through the National Flood Insurance Program.

Annual premiums, based on where you live and the value of your home, vary from $119 to $5,700. Homes in low-risk areas are cheaper to insure.

Congress, however, has yet to reauthorize funding for the federal flood insurance program. Its deadline passed a month ago and the U.S. Senate failed since to agree with the reauthorization.

This indecision and lack of funding restricted homeowners for the last four weeks from securing flood insurance.

The political stall left others, who wish to buy homes in the 100-year flood plain, in limbo. Before closing, mortgage companies require homes in the flood plain to have flood insurance.

"This happened in the midst of the homebuyer's tax credit," said Louise Hull Patillo, a Victoria real estate broker. "Those contracts have to close by June 30. So, some of our clients are just sitting on hold."

The U.S. Senate is expected to meet Tuesday.

WIND INSURANCE

Rainfall from hurricanes poses danger because it often spurs rising water. Hurricanes also unleash wind, which can tear through and destroy homes.

Most basic homeowner's insurance policies for homes in Victoria cover wind damage. Policies for homes on the coast, however, do not.

Most insurance companies opted to exclude wind damage from policies on homes that abut the Gulf's waters, Janecka said.

Thus, homeowners in coastal communities must buy typical homeowner's insurance, plus extra wind and flood coverage.

Coastal homeowners can buy wind damage insurance from the Texas Windstorm Insurance Association, a pool of insurance companies authorized to provide coverage in Texas.

Just as with flood insurance, though, new policies cease when a storm rolls into the Gulf of Mexico.

"Monday was the last day to secure a wind policy," Janecka said.

Janecka and Martin stressed homeowners should know before a storm enters the Gulf what their insurance covers and what it doesn't.

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