Like most business owners in El Dorado County, Bill Carey, owner of the St. Pauli Inn, doesn’t have flood insurance.
His Whitehall business suffered only minor flooding, and New Year’s damage from the swollen American River was slight and the cleanup quick.
“We don’t carry flood insurance because it’s so expensive,” Carey said. “I doubt any of the people that live around here have it either.”
Throughout El Dorado County only 190 policies are in force through the National Flood Insurance Program, a division of the Federal Emergency Management Agency, which underwrites almost all flood coverage in the nation.
Nobody with FEMA or the insurance organizations could estimate how much of the four-county region’s roughly $45 million in damage to real and personal property was covered.
FEMA, however, estimates that only 25 percent of structures in the nation’s flood plains are covered by flood insurance. Because much of the region’s flooding occurred in Carey’s neck of the woods – outside the designated flood plains – the numbers are likely to be lower.
“With flood insurance, it’s out of sight, out of mind,” said Candysse Miller, spokeswoman for the Western Insurance Information Service, a consumer education organization based in Los Angeles. “A lot of people are surprised to find out that their homeowners’ insurance doesn’t cover flood.”
* What’s covered and what’s not: Lenders whose loans are backed by the Federal Deposit Insurance Corp. must require that their clients living in designated flood plains carry flood insurance. This is sold through insurance agents and is underwritten by the National Flood Insurance Program.
For single-family dwellings, the maximum coverage is $250,000. Additional insurance can be purchased to insure contents up to $100,000. For the most part, the policies are enough to cover the debt outstanding on a home loan, but can be increased if the buyer wants.
The maximum on business policies is $500,000 for structures and another $500,000 for contents. Both commercial and personal policies can carry various deductibles that increase or decrease the price. The average National Flood Insurance Program policy costs $300 a year for about $98,000 worth of coverage.
Depending on the flood threat of a given area, prices can be lower or higher. The New Year’s Flood will not raise prices, a FEMA spokesman said.
* Tougher requirements loom: For years there were no teeth to the law that requires flood insurance on FDIC-backed loans. In the past, many people bought flood insurance when they took their loans out, and then let it lapse, said Mark Stevens, spokesman for the FEMA’s headquarters in Washington, D.C.
Two years ago, though, new laws were implemented that allow for fines to be imposed on lenders that don’t keep track of their flood-plain home loan clients and their flood insurance. Fines for lenders not complying are $350 per violation, rising up to $100,000 per lender per year.
The Mortgage Bankers Association of America says 60 percent of the nation’s homes carry mortgages. Those that are owned free and clear and are in flood plains have no insurance requirements.
The stiffer laws and population of growth – combined with the memory of the January and March 1995 floods – have caused an uptick in the number of National Flood Insurance Program policies in place in the four-county area, especially in Sacramento County.
Including all its cities, Sacramento County has 62,735 policies in place, according to the National Flood Insurance Program, up from 54,241 two years ago.
Placer County residents hold 876 policies, down from 1,027 two years ago.
In Yolo County there are 2,950, compared to 3,541 in January 1995.
1995 numbers are not available to compare to El Dorado’s current tally of 199 policies.
One of those El Dorado businessmen not carrying flood insurance, St. Pauli’s Carey, did not leave everything to chance. “We have multi-peril, which is anything but flood insurance,” he said.
Bill Sirola, spokesman for the Sacramento office of State Farm Insurance Cos., said that the company has had many calls from people wondering if their homeowners policies cover flooding. The answer.
Still, the insurer has fielded some 15,000 claims in Northern California from storm damage, including falling trees and leaking roofs, among other calamities. So far, he said, those claims should add up to about $15 million.
* Rules may change: Requirements for flood insurance in Sacramento County will likely change during the next few years as the levees continue to be upgraded to withstand 100-year-flood levels – meaning that there’s one chance in 100 of a flood of such magnitude hitting in a given year. In the flatlands of Sacramento, the New Year’s deluge was a 60- or 70-year flood.
Before 1986, most of Sacramento was believed to be outside the 100-year flood plain. The ’86 floods prompted FEMA to redraw the maps, which were completed in 1989. The remap put 90 percent of the county in flood-prone areas, compared to 10 percent on the old maps.
But local officials persuaded FEMA to hold off on adopting those maps. Time and again, FEMA has been coaxed to delay the maps’ implementation.
“FEMA released the maps in 1994, but they have yet to be formally published,” said Butch Hodgkins, executive director of the Sacramento Area Flood Control Agency. “They have never been finalized. I’m not aware of any plans to reschedule their release.”
Because of the levee work that is done, under way and planned, Hodgkins added, “most of Sacramento should be out of the 100-year flood plain” by 2000. The flood agency has submitted an application to FEMA to recognize the work in progress. This may result in less flood insurance in place in the area.
Meanwhile, Carey at the St. Pauli Inn, said that he expects that his business won’t see any customers during the next eight to 12 weeks, as state Department of Transportation crews work to rebuild Highway 50. The freeway was shut only a half-mile west of the inn, choking off the traffic needed to sustain the business.
Preliminary flood assessments, as of the middle of last week, showed varying levels of damage to real and personal property throughout the four-county region.
In Sacramento County, 277 homes were reported flooded and damages were estimated at $27 million.
Some 80-plus houses were flooded in El Dorado County, but damage to isolated vacation homes may not be discovered or tallied for months. Current losses are very roughly $3.2 million.
Placer County estimated that residential and commercial losses hit $15 million.
Yolo County reported only three or four homes flooded.
The impact to the north was worse. Some 500 homes were damaged in Yuba and Sutter counties.