katrina victims just lost their case for . seems like the lending institutions would have forced to have on their policies in new orleans.

 

  • Phil 2:02 pm on August 8, 2010

    Flood insurance is available, but very expensive. Under the current system, if you made it standard for basic homeowner policies, fewer people would be able to afford to purchase a home.

    Personally, I think this might not be a bad idea. Make individuals responsible for their own flood coverage instead of a government bailout. Let those people that live near the ocean pay the cost instead of the rest of us paying for others to have nice ocean views.

  • aunt_webby 2:02 pm on August 8, 2010

    cos not eveybody could have afforded it ?

  • mbrcatz17 2:02 pm on August 8, 2010

    Well, not all homes have MORTGAGES on them! And not all mortgages are STANDARD mortgages! And sometimes . . .if someone lets their flood insurance lapse, the mortgage company doesn’t CATCH it.

    Yes, if the house had a standard mortgage on it, the loan would have required flood insurance. Sometimes, the homeowner has to take some of the responsibility, too, though – you can’t depend on your MORTGAGE COMPANY to take care of you.

  • berge70 2:02 pm on August 8, 2010

    Most of these people were living from week to week or day today. They barely had money to feed themselves let alone buy expensive insurance.

  • Nate W 2:02 pm on August 8, 2010

    Homeowner’s and flood insurance are not required by law to have.
    If you have a mortgage, they will require you have homeowner’s and possibly flood insurance depending on where you live, to protect their investment. As for New Orleans, most lenders did require it.
    Many of the homes there, particularly in the heavily damaged areas are older and have been completely paid off some time ago. If you own the house it’s your choice to buy insurance on it or not. Apperently, many people opted not to have flood insurance due to it’s high cost in the area. They have no one to blame but themselves.

    As for the answers above about people not being able to afford it, that’s no excuse. Don’t buy a house unless you can afford to insure it properly, move to where you can afford it, or accept the fact you that are at risk and cross your fingers your home isn’t damaged by something you don’t have coverage on.

  • FaZizzle 2:02 pm on August 8, 2010

    Not all homeowners in California have earthquake insurance.

    Specialized insurance like that is EXPENSIVE. And if you don’t have a huge reason to worry, why should you?

  • ME 2:02 pm on August 8, 2010

    most mortgage companies only require that u carry flood insurance if u live in a "special flood zone". believe it or not, a lot of those people in new orleans were in a low risk zone! so even if they have a mortgage, they probably wouldnt require them to carry flood. not that i dont think they should have anyway — i mean if i lived 7 feet below sea level i think i’d want the peace of mind!

  • Barry 2:02 pm on August 8, 2010

    You are reading too much into news reports about one lawsuit.

    The other answers are correct and everyone with a mortgage and who lived in a "flood-zone" was required to have flood insurance, at least to the amount of the mortgage. However, the maximum flood insurance you can get for a home is $250,000 and you are not allowed to over-insure the home.

    Only half of New Orleans is below sea level and not all of it is "flood zone".

    There was actually a very high percentage of homes in New Orleans covered by flood insurance at the time Katrina struck – one of the highest in the country. Note that flood insurance is NOT expensiv e.

    The problem was that any home with 50% or more damage was declared destroyed, That meant the flood insurance check was made out to the mortgage company and the homeowner got only whatever was left over – if any.

    Many,many people in New Orleans who had flood insurance saw the money go to the mortgage company, leaving them with nothing to rebuild.

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