Flood insurance or graduation dress? As costs go up, Houston families face tough choices – Houston Chronicle
The Doss family knows the importance of having flood insurance in the Houston area. In 2017, their East Houston street flooded during Hurricane Harvey even though they do not live in a floodplain; Geraldine Doss remembers the water seeping in under the doors, then bubbling up under the windowpanes. Her family escaped through waist-high water that nearly knocked over her daughter, who was carrying their dog in her arms.
So flood insurance is a priority. But now, as inflation grips the country, priorities are being pitted against one another. The cost of regular home insurance (which does not cover flooding) has shot up, as have the costs of gas and food. Her daughter, after a high school experience defined by COVID, is now a senior looking forward to the normalcy of end-of-school celebrations, which will entail their own expenses. Add on top of that a change in how the Federal Emergency Management Agency rates flood risk, which is pushing her flood insurance rate up to $942 from roughly $450, and the family is facing difficult decisions.
“You have to pick and choose,” said her husband, LaRon Doss. “Are you going to get flood insurance or are you going to get your daughter’s graduation dress?”
Politicians and affordable housing advocates fear that many families throughout the Houston area will soon face similar choices. The National Flood Insurance Program, through which FEMA provides coverage to the vast majority of country’s flood insurance policy holders, has required multiple bailouts from Congress as its rates fall short of covering the damages sustained by enrolled homeowners. So it is recalculating its pricing. Houston-area insurance brokers say that change will cause some of their clients’ rates to eventually go up hundreds or even thousands of dollars. The development is a boon for many private insurance companies, which no longer have to compete with the National Flood Insurance Program’s formerly low rates. But that larger impact, many fear, is that the added cost will cause many homeowners to opt out of flood insurance altogether — especially low-income homeowners who need insurance the most.
The Doss family, for example, is choosing to go without flood insurance until after they’ve dealt with graduation expenses.
“I pray to God,” said Geraldine Doss, contemplating rain and hurricanes that could cause flood damage, “Whatever comes, bypass us with it.”
Geraldine Doss touches her daughter, Cafferiana Bernard’s, head as she passes by her while preparing dinner Thursday, Dec. 2, 2021 in Houston. The National Flood Insurance Program has required multiple bailouts from Congress, as its rates fall short of covering the damages sustained by enrolled homeowners. So it is recalculating its pricing — and Houston-area insurance brokers say that change will cause some of their clients’ rates to eventually go up hundreds or even thousands of dollars. Doss, who owns a Habitat home in East Houston, says the added cost will cause her family to make sacrifices as one of her children graduates from high school. “The money you used to make cover the expense of living, it’s not covering the cost of living anymore,” she said.
Brett Coomer, Houston Chronicle / Staff photographer
Increased rates
Homeowners with existing policies will not see new rates until April 1. But homeowners seeking new policies — or who, like the Dosses, chose to let their insurance lapse until next hurricane season — saw the new rates take effect Oct. 1.
In the Houston area, about 453,000 of state’s 498,000 national flood insurance policies — 91 percent — will be hit with increases, according to FEMA data. The rest will see costs stay flat or decrease. While most policies will see premiums increase by less than $120 in the first year, the first-year projections FEMA has released only tell a partial picture. Annual premium increases are limited to 18 percent under law. So the premium for a house not located in the flood zone — $572 in 2021 for maximum coverage under the old system — could only go up $103 in the first year.
And private insurers can provide more options than NFIP ever offered, said Shelby Smith of R.G. Smith Insurance Agency.
“They are giving loss of use” — money for a temporary place to stay while insurance repairs your home — “which you don’t have with FEMA. And they’ll put you on a monthly plan,” helping break the costs of flood insurance into more affordable installments, he explained.
Chelsey Hernandez of Gibraltar Insurance Services has already moved to a private carrier. Her Pasadena home, which is not in a flood zone, saw its NFIP premium rise to more than $1,400 from $572, she said.
At her now uninsured home, Doss sighed over the costs of flood insurance as she prepared dinner for her family. “How fair is it to them?” she said, nodding to her high school senior and her son, who’s a sophomore on the basketball team. “You’re not only impacting me as a homeowner. You’re impacting everyone down the line… I don’t think it’s right.”
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