Flood, the missing peril in a 7.4-inch year

Flood is the peril that a homeowners or renters policy generally leaves out. The Department of Insurance states it twice, from two directions: many people may not be aware that homeowners’ and commercial insurance policies typically exclude flood, mudslide, debris flow, and other similar disasters, and in its residential guide, that insurance coverage for losses resulting from floods is generally not provided in a homeowners or renters policy. In a city whose typical rainfall is 7.4 inches per year, that absence is easy to file under things that do not apply here, which is exactly why it is worth reading to the end.

The programme that writes the policy

The contract comes from the National Flood Insurance Program, which the U.S. Congress established in 1968, responding to the rising cost of taxpayer funded disaster relief for flood victims and to the increasing amount of damage caused by floods. It is administered by the Federal Emergency Management Agency and makes federally backed flood insurance available in communities that adopt and enforce floodplain management ordinances to reduce future flood losses. Policies are sold by state licensed property and casualty agents and brokers dealing directly with FEMA, or by private insurance companies under the Write Your Own programme.

Thirty days from purchase, with one exception

The policy will take effect 30 days after it is purchased. The clock runs from the purchase itself, which makes flood cover unlike almost anything else in a household file: buying it late is the same as not buying it. The one exception is a mortgage from a federally regulated lender on a house in a designated high-risk area. If you buy a house in a designated high-risk area and receive a mortgage loan from a federally regulated lender, the law requires the lender to make the borrower purchase and regularly renew flood insurance, and in that case the policy takes effect immediately with no 30-day wait.

What the policy covers, and the exclusion that surprises people

In general, cover is provided for direct physical loss to property from a flood, which the programme describes as a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area, or of two or more properties at least one of which is yours, arising from the overflow of inland or tidal waters, from unusual and rapid accumulation or runoff of surface waters from any source, or from mudflow. Mudflow has a narrow meaning here: landslides, slope failures and saturated soil moving down a slope are not mudflows.

And in general, the policy excludes losses caused by earth movement, even if the earth movement is caused by flood. The examples given include earthquake, landslide, land subsidence, sinkholes, destabilization or movement of land resulting from accumulation of water, and gradual erosion. In general is the Department’s hedge and it stays here.

The maximum amounts, and who regulates the programme

The maximum coverage amounts for a single-family home, the Department states, are $250,000 for the structure and $100,000 for its contents; renters may also purchase up to $100,000 of coverage for their personal belongings. Two further points. The California Department of Insurance does not regulate the National Flood Insurance Program. Flood insurance is a federal programme. And the California FAIR Plan currently does not cover storm-related damage unless the consumer has bought a supplemental difference in conditions policy from another insurance company, and a household that has moved to the FAIR Plan without that second policy has not solved water in the process.

Where Palmdale is actually mapped

The City’s Safety Element is specific rather than reassuring. In Palmdale, localized flooding occurs when rainfall is heavy and prolonged. Areas with known flood hazards include the natural drainage channels of Amargosa Creek, Anaverde Creek, Little Rock Wash and Big Rock Wash, and those channels are subject to the one-percent-annual-chance flood, also called a 100-year flood. Portions of Palmdale adjacent to Amargosa Creek and Anaverde Creek, along the southwestern portion of Palmdale, are classified by FEMA as Zone A, AE, or AO. A wide swath along Little Rock Wash in the eastern portion of the city is also classified as Zone A. Flat plains and natural depressions in Palmdale are also subject to flooding, and those depressions combined with increases in impermeable surfaces have contributed to street flooding caused by storm water runoff.

Low risk is not the same as no risk

The Department’s advice is aimed squarely at readers in places like this one. Its experts suggest Californians, including those in traditionally low-risk areas, take the time to assess your flood risk today and determine if you need coverage before the next storm. Neither the mapped zones nor the annual rainfall figure tells you what any particular property will do in a particular storm, and no page can. What both do tell you is that the question has an answer worth asking for, and a 30-day wait attached to the asking.