Although the rain fell and floods came with Hurricane Irene, it was not quite on a Biblical scale, but it was certainly devastating to many communities that had never before believed it possible they could be the victims of flooding. Yet, in upstate New York and Vermont, entire communities have been introduced to a new reality of flooding and mudslides. No matter what you think about all these stories of global warming and climate change, there’s an underling reality you can’t deny. This has been a bad year for weather. Read any of the hard news sites and they will all tell you the same story. Property and auto insurance claims have already broken records this year. By the time we’re through December, the year 2011 will have gone into the books as the most expensive for weather-related insurance claims.
Perhaps not surprisingly, insurers have been receiving a lot more calls asking about flood insurance. Obviously, many homeowners have discovered their own policies exclude flood damage. In the hope of reducing future losses, they now ask what’s available and this is not good news. The majority of private insurers withdrew from covering floods some years ago. For a number of reasons, insurers have found they cannot make flood insurance profitable and they are not prepared to cross-subsidize from other types of cover. Most now only offer the Federal Flood Insurance Program which is funded out of tax revenues. As an aside, even this insurance may be lost if Washington fails to renew its funding allocation by the end of September 2011. (more…)