Why more Angelenos should consider flood insurance

LOS ANGELES — Already this year, Los Angeles has seen heavier than normal rainfall that’s flooded streets and structures. Two additional atmospheric rivers are rolling in to douse Southern California this weekend, bringing with it the potential for even more flooding and property damage.

Yet it’s the rare Angeleno who has flood insurance. Just 15,141 of LA County’s 3.6 million housing units are covered for flooding, according to the Federal Emergency Management Agency. A study from the University of California Irvine last year found that a once-in-100-year flood could overwhelm 452,000 LA County residents with a foot of flooding and cause $56 billion in property losses.

The parts of LA County most susceptible to flooding are the Venice Canals, coastal Long Beach and areas east of the Los Angeles River, according to the National Oceanic Atmospheric Administration. Still, wherever it rains, it can flood, according to FEMA, which estimates that just an inch of flood water can cause $25,000 in damage.

Homes susceptible to flooding include those near wildfire burn scars where there’s no longer vegetation to hold and absorb water, as well as areas that do not have enough space for water to run off or where the ground is hard and doesn’t absorb water very easily , according to the National Property Casualty Insurance Association.

“There’s been a misconception in our industry and within the real estate community that you buy flood insurance if you’re located in a floodplain and the mortgage lender requires it. If not, you don’t think you have the risk,” said Donald Griffin, department vice president for the NPCIA. “The key for most people is to look at the risks they have.”

Flood insurance is similar to earthquake insurance, in that it is an additional policy to basic homeowners insurance that, in most cases, does not cover flooding. Policies cost an average of $750 annually, Griffin said.

The vast majority of flood insurance policies are issued through FEMA, which limits coverage to $250,000 per building and $100,000 for the building’s contents. Through FEMA’s National Flood Insurance Program, there is no coverage for basements, except for HVAC equipment. If a property has become uninhabitable because of flooding, the policies do not cover living expenses such as hotels. About 10% of the nation’s 1,200 private insurance carriers offer excess flood insurance policies to supplement those written by FEMA’s National Flood Insurance Program.

While many mortgage lenders require homes in FEMA-designated flood hazard zones to carry flood insurance, few homeowners have it. The number of LA County homes with flood insurance has been decreasing since 2015, when 30,740 homeowners carried such policies. Last year, half as many homes in LA were insured for flooding, according to FEMA.

To protect themselves from possible damage, FEMA recommends homeowners get flood insurance, know their flood risk, take a household inventory and store important documents. The agency said homeowners can reduce their potential losses from flooding by elevating and anchoring utilities, clearing debris from gutters and elevating or moving furniture.

FEMA also recommends building at or above the latest hazard-resistant codes and standards to reduce risk, noting that adoption of the latest building code requirements saves $11 for every $1 invested.

“Without reduction in flooding risks and an increase in flood insurance uptake, the costs of flooding damages and rebuilding will continue to accumulate,” California Insurance Commissioner Ricardo Lara wrote in the state’s first Climate Insurance Report in 2021.

The report projected an escalating intensity of high precipitation storms that put people and properties at risk of growing damages and that combined or successive impacts from pulses of heavy rainfall, faster snowmelt and rising rivers put more communities at increased risk of flooding.

Lara described the potential for flood recovery as “worrying” as climate impacts increase, especially since so few property owners have flood insurance. Of the 1.1 million homes in California with at least a 1% chance of flooding, less than half have flood insurance policies, the report said. Areas with more moderate risks have even lower rates of flood insurance.