Five years later, tens of thousands of New Orleanians are still displaced from their homes, and many have simply moved on and re-settled in other cities. Nearly 1,000 families in New Orleans itself still lack permanent housing. And as all the TV coverage of the five-year anniversary reminds us, people all over both the private and public sectors were caught flat-footed by the immense scale of the disaster.
Now it’s true that here in Dallas, we’re not surrounded by crumbling levees. We’re nowhere near as vulnerable as New Orleans was at the time of Katrina. But we are located in tornado alley, and the Trinity River is prone to flooding, and there’s no real way to natural calamity-proof our entire city.
So, in honor of those still suffering from Katrina’s impact, let’s talk about one truly important means of preparing for a natural disaster—homeowners insurance.
Here are three things to know:
It’s a Good Idea
While it’s a good bet a flurry of post-disaster government relief initiatives would be launched, the massive scale of something like Katrina would almost inevitably overwhelm their capabilities and leave homeowners in a frustrating, intractable bureaucratic mess.
And while in many ways the private industry didn’t respond much better to Katrina, it’s a good idea to be covered on as many fronts as possible. Be patient, plan ahead with solid coverage, cover yourself from all angles , and you’ll find the help you need.
Floods Might Not Be Covered
One common problem we saw repeatedly in the wake of Katrina was the widespread lack of flood insurance. Many people don’t realize that standard homeowners insurance policies don’t cover flood claims. So hurricane victims are often left scrambling to prove that the damage to their homes was more wind-related than flood-related. They often only get partial compensation, if any at all. (Here’s a nifty list of calamities your homeowners insurance policy might not cover ).
Even without the threat of hurricanes, floods are a real possibility for many homeowners in the Dallas-Ft. Worth area. A severe flash flood can do in minutes what the slow drowning of New Orleans did over two weeks.
Check out the flood maps of your area to gauge your home’s flood vulnerability, and whether or not your area is eligible for coverage. And, if so, make sure that you’re covered—either in your homeowners insurance policy, or via a separate flood insurance plan.
Cover Everything
It’s a good idea to insure your house for the entirety of what it would cost to rebuild the whole thing. If you don’t, you could end up in long, drawn-out struggles with the insurance company about what qualifies for coverage and what doesn’t. There are multiple ways to structure your coverage — read here for more specifics — but make sure you consider all the hidden costs of a natural disaster (valuables in the home, temporary dislocation costs, rising re-building costs) when planning for the possibility of a big one.
Check out our homeowners insurance resources section for more information, including 12 tips for how to save on homeowners insurance . Or contact our Dallas mortgage experts for more information.