Skip to main content
Insurance

The Flood Response Fiasco: FEMA and Insurance

By October 8, 2024No Comments

By now, you’re likely aware of the devastating flooding caused by storm Helene in western North Carolina and Tennessee. Many of us have friends, family, and customers in the Asheville area and other affected regions. Our concern for these areas extends beyond just insurance damage.

This destructive storm hit Florida, Georgia, the Carolinas, Tennessee, Kentucky, and even parts of Ohio. We’ve all been watching in shock, whether or not we have personal connections to those places. The videos show a level of devastation that is rare, especially in the mountainous regions.

Normally, FEMA is quick to step in and provide help after such disasters. Supplies like food, water, blankets, and sanitation essentials take time to reach those in need, especially in widespread disasters like this one. However, this time, the response has been unusually slow. Shockingly, as of the time of this writing (10/04/2024), private donations and charitable groups, such as Samaritan’s Purse, Salvation Army, and Mercury One, have delivered more aid than the government. According to Homeland Security Secretary Alejandro Mayorkas, FEMA is running out of money!

The government’s primary duty is to protect American citizens, but sadly, this doesn’t always go as planned. One key lesson from this disaster is that you can’t rely on the government to bail you out—it’s a vital risk management lesson. In North Carolina, for example, less than 2% of property owners have flood insurance. This means recovery will be slow for those without coverage – which is just about everyone.

Similarly, for those of us in California, only about 20% purchase earthquake insurance. While I’m no earthquake expert, it’s not hard to imagine that if we had a 7.6 earthquake in the Los Angeles area, the damage would far surpass what we’ve seen in the Blue Ridge Mountains from Tennessee to Lake Lure, North Carolina.

Even worse, if a major quake strikes off our coastline, flood insurance may also be necessary to cover damage from tsunami flooding. Unfortunately, flood insurance is often seen as something you only need in order to qualify for an FDIC loan. As a result, very few flood insurance policies are sold in California.

While there will always be issues with initial disaster responses, recovery can be faster and more efficient. If this storm has taught us anything, it’s that insurance—not government aid—is the best way to ensure funds are available for rebuilding. Insurance not only covers reconstruction but also provides money for living expenses while you’re displaced from your home.

Remember, the government won’t be the solution when it comes to rebuilding your life. They’ve struggled to even provide some supplies in this disaster.  Yes, FEMA’s response is inadequate. The right insurance coverage can make all the difference, for initial funds and housing as well as repairs and rebuilding,  and it is far more affordable than taking out a loan to repair your home.