Louisiana Commissioner of Insurance James Donelon on the flood insurance crisis in the state.
Louisiana flood victims are discovering a new nightmare as many residents who lack flood insurance coverage weren’t aware that they lived in a flood zone.
Insurance Commissioner of Louisiana Jim Donelan said there is assistance available for uninsured and underinsured properties owners through the Federal Emergency Management Agency (FEMA) program and FEMA’s National Insurance Program which aims to reduce the impact of flooding on private and public structures.
“Our take up in Louisiana at 21% is probably above the national average for residences insured for floods. The Baton Rouge area and Lafayette, both of which were devastated by these floods is below that state wide average for reasons that are understandable. They haven’t been flooded…in decades,” Donelan said on the FOX Business Network’s Intelligence Report.
Residents who live in a designated flood zone are required to have property flood insurance. An estimated 42% of homes in high-risk areas have flood insurance, according to FEMA.
According to Donelan, home owners with federally backed mortgages are often told they don’t have to acquire flood insurance because they are in a low-risk area.
“The consumer who maybe buying their first home, tight budget, young kids to raise and educate, says well if the lender says I don’t have to do and that would protect him for free, why should I put that in my budget and come out of pocket for that additional expense,” he said.
But are tax payers on the hook because there’s no regulation requiring flood insurance for homeowners living in flood zones?
“The regulations that require flood insurance only require for vulnerable high risk areas,” Donelan explaind.
FEMA announced today the extension of the grace period to renew flood insurance policies by 120 days.