Much of the Houston area falls outside those most vulnerable zones and many homeowners who aren’t forced to have coverage have decided to do without. Now they are stuck because much of the damage in the nation’s fourth largest city won’t be covered by their homeowners insurance.
Unlike Corpus Christi and Rockport, much of the Houston area was damaged by flooding, not winds.
“There’s going to be a huge uninsured economic loss here,” said Pete Mills, a senior vice president at the Mortgage Bankers Association.
About 1.2 million properties in the Houston-Sugarland-Baytown area are at high/moderate risk of flooding but are not in a designated flood zone requiring insurance, research firm CoreLogic estimates. That’s roughly half of all properties — residential and commercial — in that area.
Hunter of the CFA said that homeowners without flood insurance can possibly apply for federal disaster relief benefits, but those come in the form of low interest loans, a burden for those already struggling with too much debt.
“If you have $30,000 in damages, you can get maybe $25,000,” Hunter said. “But there will be interest, and then you have your mortgage. You’ll have two loans on your house.”
Homeowners with water damage can get paid through their homeowners insurance but only if wind blows out a window or sends a roof aloft first, allowing the water in. If the water rushes through the floorboard or walls, you’re not covered.