Hurricane Florence brought more floodwaters to Wayne County this year than Hurricane Matthew did in 2016.
Insurance agents say flooding will continue to be a problem for Wayne residents as each hurricane or tropical storm makes its way through the area.
The recent hurricanes also struck areas where flooding previously wasn’t a concern.
When it comes to flood insurance, everyone lives in a flood zone, said Paula Schultze, insurance agent for Crawford-Henderson Insurance in Goldsboro.
What matters, she said, is if someone lives in a designated high-risk flood zone. Areas near creeks, streams and rivers are often susceptible to flooding, but many people live in these zones without flood insurance.
Schultze said some people just don’t want to spend the money for the insurance or they think their properties will not flood.
“I really thought more people would come in for flood insurance after Matthew than they did,” Schultze said. “We had a few people that called. It got really close and they wanted to get quotes, that kind of thing. And we did sell a few policies but not two out of three people or anything like that.”
HIGH COST, FEWER POLICIES
Crawford-Henderson Insurance has sold only 80 flood policies, which Schultze said she finds surprising.
Compared to the number of homeowners the company serves, there are not many people who have purchased flood insurance, she said.
“With every storm, it seems like we get more areas that flood than the time before or at least the same areas flood,” Schultze said. “You would think the people in those areas would be like, ‘Hey, I’m getting a flood policy.’”
Schultze said one reason there could be a disproportionate number of people living in high-risk flood areas without flood insurance is the cost. She said the company quoted one home near the Neuse River a $5,000 per year premium for $50,000 in coverage, which she compared to a home located in the “preferred” zone quoted $450 per year for $250,000 on the dwelling and $100,000 on content.
“That’s a lot of money to pay for just a flood policy,” Schultze said. “We don’t have flooding ever year, and we’re having it more often now, but that’s a lot of premium to pay for a small business or an individual if they’re in that high-risk zone.”
Schultze said flood insurance is mandated by the federal government, so premiums are the same at all insurance agencies if the property is quoted and mapped correctly.
Insurance agencies do not control premium costs, she said, and the amount is calculated based on the year of building construction, the number of floors, where contents is located in the home, flood risk, location of the lowest floor in relation to the Base Flood Elevation on the flood map and the deductible and amount of building and contents coverage.
Just a few months before Hurricane Florence hit Wayne County, Schultze attended a conference that discussed flood insurance. There, she learned that less than 12 percent of homeowners have flood insurance and 98 percent of the U.S. population lives in a county that has experienced a flood disaster in the past 30 years.
AFTER FLOODING, HOMEOWNERS REMAIN
According to the Federal Emergency Management Agency, more than 20 percent of flood claims come from properties that are outside high-risk flood zones.
That is why suggesting people move out of high-risk flood areas is impractical.
“Me personally, if it happened to me one time, I’d be done,” Schultze said. “But, there are people that do move back in — that’s their home or they’ve been there and they’ve raised their family there. I can understand why you wouldn’t (want to move), but I’d definitely have a flood policy in that case.”
Lisa Musselman, owner of Crawford-Henderson Insurance, said it is unlikely people will move out of high-risk flood areas, even if they have previously experienced damages from flooding.
“They can’t afford to move,” Musselman said. She added, “If they have a mortgage, they can’t afford to just move because they’re going to have to sell it. Well, who’s going to buy it?”
Renee Hinson, whose Hood Drive home was almost submerged by floodwaters during Hurricane Matthew, said that moving out of the area was not a viable solution.
Hinson and her husband, Carlton, wanted to remain in the Grantham community to be near their children, but it was nearly impossible to find a new property on which to build their home.
“People say, and I hear this from politicians too, they say, well you just need to get out of those areas … but people don’t realize how hard it is to find somewhere else to go,” Hinson said. “We just saw that was not going to be a solution for us.
“People who have never been through this before, they don’t have a clue.”
Hinson said her family has paid $2,100 a year for flood insurance for more than 17 years. After Matthew destroyed their home, they were able to pay off their mortgage and build a modular home on their property.
“It’s just really a hard, devastating thing to go through …” Hinson said. “If you’re not in that situation, you don’t understand.”
SOME LENDERS REQUIRE INSURANCE
Schultze said that many banks require people to have proof of flood insurance before they receive a loan, if they are purchasing property in high-risk flood zones, which she said adds to the complexity of the situation.
“Some of the banks, depending on what area you’re in, they’ll require flood insurance before they’ll give you a loan,” Schutlze said. “You can’t just say, here, buy my house and not tell somebody because the banks have gotten to where they can pull the same reports and know which ones are likely to flood.”
Real estate agencies are also required to disclose whether or not a house is in a flood zone. Nancy Connolly, a realtor at Coldwell Banker Howard Perry and Walston, said she has had clients shy away from properties because of the flood zone and high flood insurance quotes.
“There are people who, the minute you say, ‘It’s in a floodplain,’ they go, ‘No,’” Connolly said. “You can say, ‘We have a quote, this is what they’re paying for flood insurance,’ but it doesn’t matter. Just the thought of it being in the floodplain deters them.
“A lot of times, even if the buyer says, ‘OK, we’ll do that,’ it throws them out of their ratio — it makes their payment so high they can’t buy. Even if they were in agreement with the flood insurance, they can no longer afford the home.”
Michael Ellis, manager and broker in charge at Coldwell Banker Howard Perry and Walston, said that every time there is a major storm like hurricanes Matthew or Florence, the real estate business does feel a slow in sales due to properties needing to be reappraised or reassessed for damages and insurance.
However, he said that it is just part of the process and the market has already rebounded since Florence.
“That’s just the pendulum swinging back and forth and we’ll see a rebound because Wayne County is a strong real estate market,” Ellis said.
Despite some of the challenges, Connolly said they are still able to sell plenty of homes that are located near bodies of water or in high-risk flood zones.
“It’s not insurmountable, selling homes that are in the flood plain,” Connolly said. “We sell them all the time. It’s just there and has to be disclosed, but a lot of people, truthfully, don’t care. They’ll pay for that flood insurance.”
REDUCING FLOOD INSURANCE COSTS
If people do not have flood insurance and their property is damaged by a flood, Schultze said they may qualify for FEMA assistance or a U.S. Small Business Administration loan. Still, they need to file a claim on property damages and may receive a FEMA loan to rebuild or raise the home. Anyone receiving a U.S. Small Business Administration loans is required to pay back the loan, with interest.
“That’s hard for people, too,” Schultze said. “FEMA is there to help, but it’s not free money either. It’s kind of a never-ending cycle because it’s still probably an expense that they can’t afford. It’s sad because there are so many people who have lost so much from flooding.”
Schultze and Musselman said there are a few ways people can decrease the cost of flood insurance. If someone’s house or property is elevated, they can present insurance companies with an elevation certificate, which can lower the cost of insurance.
“If they’re elevated and there’s nothing underneath it or breakaway walls, it’s going to be cheaper,” Musselman said. “Most people aren’t building up, though.”
Hinson was fortunate that her family was able to raise their new modular home by 5 feet with the leftover money from their flood insurance. With the final elevation certificate, she said their flood insurance policy was down to $450.
“We would not have stayed without elevating …” Hinson said. “After we got our home here and got our last elevation certificate, we’re not even in the flood zone anymore (because the maps changed).”
One downside to purchasing an elevation certificate is cost, Schultze said. If the building was already elevated and the person does not have a certificate of elevation, they may have to pay a surveyor to assess the property.
“If it’s not new construction and you don’t have one, then you have to get a surveyor out there and do that and it could be $600 to $800 — that’s an expense to start with and then whatever the flood policy costs,” Schultze said.
‘THEY CAN’T AFFORD TO BUY IT’
Overall, Schultze and Musselman said Crawford-Henderson has not experienced an increase in the number of people purchasing flood insurance, even after disasters such as Matthew and Florence. They said the reason is most likely due to the high price of insurance policies in high-risk flood zones.
“We have some that are in flood areas around here near the river or creeks, but most people that live in this area wouldn’t have flood insurance …,” Musselman said.
“I just think it’s cost. They can’t afford to buy it.”