Few have flood insurance to help recover from devastating Midwest storms

SOUTH SIOUX CITY, Neb. (AP) — Rick Satterwhite’s home backs onto the Missouri River, but flood insurance didn’t seem necessary — until this week, when he had to pump water from his basement after a series of devastating storms.

It wasn’t the first time he had to drain the basement before a flood, but dangerous storms were becoming more frequent, he said. Satterwhite watched in horror on Monday as a river came within 2 feet (61 centimeters) of his back door in Dakota City, Neb., after heavy rain caused record flooding in the Midwest, destroying hundreds of properties.

“I talked to our agent today,” Satterwhite said. “We’re going to get flood insurance now.”

Satterwhite is not alone. As the Midwest begins to recover, many will not have flood insurance, which must be purchased separately from home insurance. Federal data shows that in the flooded states of Nebraska, South Dakota, Iowa and Minnesota, the government issued a total of only about 26,500 flood insurance policies.

Lack of insurance can burden homeowners with out-of-pocket repair costs and increase the need for nonprofits and the government, said Emily Rogan, senior program officer at United Policyholders, an insurance consumer group.

In Iowa, for example, the consulting firm Milliman estimates that in the 22 counties affected by the governor’s disaster declarations, less than 1% of single-family homes have government flood insurance, which issues the vast majority of policies.

According to Tom O’Meara, CEO of Independent Insurance Agents of Iowa, many people believe flooding won’t happen to them and isn’t worth paying another bill. He added that Iowa property insurance rates have skyrocketed in recent years after a series of costly weather disasters. Flood insurance avoidance comes as climate change increases flood risk, creating conditions that produce wetter storms.

Last week’s storms also severely flooded smaller rivers that rarely flood, taking people by surprise.

“I don’t think people have a lot of personal experience with floods like this,” said Nathan Young, deputy director of the Iowa Flood Center.

In 2022, the average annual price for federal flood insurance was $935. Federally backed mortgage loans and many banks require flood insurance in high-risk zones identified by the Federal Emergency Management Agency, but these maps do not account for flooding from all sources, such as rain. FEMA’s recently updated prices reflect more factors, and the agency says these prices – not flood maps – are the best indicator of risk.

In Iowa, hundreds of people are being helped at American Red Cross shelters. Workers ask people about their loved ones and basic needs. Then they help victims assess the damage and what can be done. That’s when some people first realize they need to buy separate flood insurance, said Charles Blake, senior director of disaster services for the American Red Cross. People who have policies are very grateful, he said.

“It gives you wings,” Blake said.

Others, like Ben Thomas, consciously avoid flood insurance and take on the risk themselves. For nearly two days, Thomas pumped water from his basement on the north side of the Little Sioux River in Spencer, Iowa, moving between his home, his parents’ riverfront property across the street and other neighbors.

“I don’t believe that insurance is the solution to life’s problems,” he said. “I would say we made a very conscious decision, but in this case we got burned.”

While he does not regret his decision not to buy the expensive policy, he admitted that residents may feel differently on the south bank of the river, where some homes are unlivable when there is water on the ground floor.

The National Flood Insurance Program covers up to $250,000 per building and offers contents protection policies worth up to $100,000. This isn’t always enough to replace an entire damaged home, and while the private market is small, it does provide policies that can fill the gap.

Help is available for uninsured people. The federal government’s disaster declaration for parts of the flooded area allows it to provide grants and low-interest loans to help with temporary housing, some home repairs and basic supplies such as cleaning supplies and baby formula.

“We can still help,” said John Mills, spokesman for FEMA’s response team, but flood insurance provides much more money.

FEMA’s new pricing method resulted in rate increases for about three-quarters of policyholders, but decreased rates for the rest for the first time. Selling more policies is a challenge across the country; This year, slightly fewer people are buying them.

According to Rob Moore, director of flood solutions at the Natural Resources Defense Council, the problem is that FEMA has no authority to lower premiums for low-income people.

“Only Congress can fix this,” he said.

And when restoration begins, it’s the easiest time to mitigate the risk of another flood, said Chad Berginnis, executive director of the Association of State Floodplain Managers.

“Rather than immediately rebuilding the situation in the same way, stop and think about what you can do to protect yourself,” Berginnis said. “No one wants to lift their house on a sunny day or deal with flood defenses.”

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Associated Press reporter Hannah Fingerhut in Des Moines, Iowa, contributed to this report. Phillis reported from St. Louis.

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