Only 2 out of 10 victims of 'Harvey' have insurance

Only 2 out of 10 victims of 'Harvey' have insurance

Many homeowners damaged by the "Harvey" flood will have to pay out of pocket for a loss, a potentially devastating blow to their finances and off the coast of US Gulf neighborhoods.

Insurance experts say that a small part of the owners on the track of the destruction left by the storm have flood insurance. This means that families with flooded basements, flooded furniture and walls damaged by water will have to exhaust their savings or borrow more to repair their homes. Some will be forced to sell, if they can, and leave their community.

All these people on the boats have a second problem: they do not have insurance, "said Robert Hunter, insurance director of the Consumer Federation of America.

"Harvey" landed in Texas on Friday as a Category 4 hurricane and moved away from the coast, raining rains like a tropical storm. Hunter says flood damage could cost at least $ 35 billion, about the amount of "Katrina." But in this hurricane in 2005, half of the flooded houses had flood insurance.

Home insurance usually covers only damages caused by the wind, not floods. To do this, you need separate coverage from the National Flood Insurance Program, a federal plan. The insurance is for homes with federal mortgages in the most vulnerable areas, known as Special Flood Risk Areas.

People living in these areas have complained for years that premiums are too high, but would probably be even more expensive if they were not subsidized by the federal government.

Much of the Houston area is out of these vulnerable areas and many homeowners who are not required to have coverage have decided not to buy it. They are now stranded because most of the damage sustained in the country's fourth largest city will not be covered by flood insurance.

Unlike Corpus Christi and Rockport, much of the Houston area was damaged by floods, not by winds.

"There will be a huge amount of uninsured economic loss here," said Pete Mills, vice president of the Mortgage Bankers Association.