Requiring all homeowners, as car owners are now, to have general disaster liability insurance on their homes, might be a public policy discussion that should begin at some point, rather than just requiring it for those who live in flood or earthquake zones.
However, extra premium could be factored in for those who do live in such zones, just as car insurance now is for teens and others most apt to have accidents.
An excerpt.
Editorial: Prepped for a deluge?
Mixed news on local flood insurance
Published 12:01 am PDT Monday, July 24, 2006
When most of Sacramento was dropped from FEMA's official 100-year flood plain last year, authorities feared that thousands of property owners would cancel their flood insurance policies, which had been mandatory up to that point.
A mass exodus from the flood insurance program would have left Sacramento, as well as individual homeowners, extremely vulnerable during a flood. Without any insurance, homeowners would face a total loss of their possessions and be unable to rebuild.
To keep people insured, the Sacramento Area Flood Control Agency launched a public information campaign last year, helped by a $162,000 federal grant. SAFCA notified nearly 50,000 affected property owners that, because of the change in floodplain maps, they could obtain "preferred risk policies" at a cheaper cost than their previous flood coverage.
The campaign, combined with powerful images of New Orleans flooding, has worked -- at least up to a point. SAFCA reports that, as of March, about 74 percent of affected parcel owners in Sacramento had retained flood insurance. The bad news is that only 14,781 of the 34,466 parcel owners retaining insurance had purchased the cheaper preferred risk policies.
The rest have retained their standard policies, meaning they are paying much more than they need to.
