Fewer than 4,000 homes in Davidson County were covered by flood insurance at the end of 2009, meaning that the owners of the vast majority of homes damaged or destroyed by this weekend’s flooding will not be compensated for their losses.
Coverage against floodwater damage must be purchased separately from traditional homeowner’s coverage and is backed by the federal government. According to data from the Federal Emergency Management Agency, Davidson and surrounding counties contain about 9,100 homes with flood insurance. Using the most recent Census population estimates and an average of 2.5 people living in a home, that amounts to less than 1.5 percent of all homes in the region.
If that number sounds low, it’s because it is, said Ashley Arnold, general counsel at the Insurors of Tennessee, a trade group that represents independent agents. Arnold said a number of people bought coverage when word spread a few years ago about the need for repairs on Wolf Creek Dam up the Cumberland. But by and large, the only people who have flood insurance were required to buy it by their mortgage lenders because they live in a flood plain.
FEMA’s detailed data suggest it’s hard to fault most Tennesseans for not buying coverage: Insurers have since 1978 paid Davidson County homeowners an average of only $230,000 per year in flood-related claims. The average annual payouts was $491,000 for the Greater Nashville area and about $2.2 million statewide. (In Kentucky, the federally backed program paid out three times as much during that time.)
FEMA’s statistics also bring up some interesting disparities in regional insurance rates. With 3,908 homes insured against floods, Davidson County’s rate of coverage to total homes is 1.56 percent, right in line with the MSA average. In Brentwood and Lebanon, that rate tops 3 percent, but Murfreesboro and Franklin have rates of 1 percent or less. In all, properties insured against flood damage were valued at a shade under $2.1 billion at the end of last year.
Here’s a short checklist of things to do and know as you’re filing claims for damage on your house or car:
• Document as much as possible about your claim. Take photos if you can and note the high-water marks on your property. List items that were damaged and include details about their value and date of purchase. You will have 60 days from the time of the loss to complete your claim.
• If you choose to hire a public adjuster — who will represent you in dealing with your insurance company during the claims process — be sure that they are properly licensed. All adjusters need to be approved for business the state’s Division of Commerce & Insurance.
• Keep in mind what flood insurance will not cover. When it comes to basements, the policies will only replace utilities and washers and dryers, not other personal property or the finishing touches you may have added. Also, unless you acquired supplemental coverage, flood insurance will only pay up to $250,000 for building damage and another $100,000 for contents.
• Be patient. That’s easier said then done during this trying time, but keep in mind that, with a number of phone lines and power lines cut, agents themselves may need some time to set up temporary operations. Expect to get an initial response in 48 to 72 hours.
“Agents and insurers wouldn’t be in this business if they didn’t want to help,” Arnold said. “Oftentimes, people get frustrated with the insurance industry in general, but the people helping you are neighbors who might be in the same situation you are.”
Also consider the sheer scope of this disaster: Arnold said that an average tornado strike might involve “six houses here and four houses there.” Today, we’re talking about perhaps thousands of homes that are likely to be complete losses.