Most of the flood damage suffered by Californians won’t be eligible for insurance coverage

Numerous individuals affected by the severe storms currently impacting California are facing an additional setback as they realize their insurance policies do not include coverage for the resulting damage.

Standard homeowners’ insurance policies generally do not provide coverage for losses caused by flood damage. Such coverage falls under the National Flood Insurance Program, administered by the Federal Emergency Management Agency (FEMA). However, in California, where drought rather than flooding had been the predominant issue until recently, homeowners are as ill-prepared for flood damage as residents in hurricane-prone Florida are for earthquakes.

NFIP data indicates that only 52,400 residences and businesses across the eight Southern California counties, declared disaster zones due to the storm, have flood insurance coverage. This represents less than 1% of the 7.7 million households within the affected region. These counties collectively house over 22.6 million individuals, according to recent Census Bureau estimates.

Los Angeles County, boasting a population exceeding 10 million, possesses merely 14,600 active flood insurance policies. This figure is comparable to that of Lee County, Florida, encompassing Fort Myers, despite having fewer than 1 million residents.

Even among those with flood insurance, some may find their policies insufficient to cover all their losses. Federal policies typically cap coverage at $250,000 for structural damage and $100,000 for home contents, limits that can be swiftly exceeded, particularly in Southern California. While homeowners have the option to purchase excess flood insurance to match their homeowners’ policy limits, many opt not to do so.

Mortgage lenders may require flood insurance for properties located in federally designated flood plains. However, in areas deemed not at risk of flooding, homeowners often forego purchasing additional flood coverage.

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