Gustav

[MTK]

Originally Posted by firstdown

Flood ins is required for a loan if it is determined to be in a high risk area so by law they have to buy flood coverage along with their homeowners policy. One reason why allot of people were underinsured was because they carried what the law required. For example. If a person owns a $200,000 home and they owe $100,000 and are in a high risk area the law states they have to carry $100,000 the balance of the loan. It also does not require the insured to cover contents as that is a option they must choose.

I'm guessing you didn't even read the article.

NEW ORLEANS -- Many of the thousands of homeowners in the Lower Ninth Ward, one of the hardest-hit areas in the city, lacked flood insurance because the neighborhood in theory was supposed to be relatively safe, local insurance agents and residents said.


Most of the area sits outside the "high-risk" flood districts designated on federal maps used for insurance, and so, unlike homeowners elsewhere in this low-lying city, most in the Lower Ninth Ward were not legally required by lenders to buy flood coverage.

Those federal insurance maps, however, were based on a vastly mistaken assumption: that the levees and flood walls protecting the neighborhood from inundation would remain intact. When the levees breached near the Lower Ninth, the floodwaters ravaged countless homes unprotected by flood insurance, and many neighbors wonder whether anyone will have the wherewithal to rebuild.