Amanda Spartz nearly did not renew her home’s flood insurance policy after her first year in Florida. Two hurricanes came close to the Fort Lauderdale suburbs last year, but they didn’t hit and her home isn’t in a high-risk flood zone. She figured she could put the $450 annual premium, due next week, to another use.

Then Harvey hit Houston, its historic rains causing massive floods even in low-risk neighborhoods. Spartz, a business analyst, paid the bill this week.

Harvey a wake-up call

If Spartz had dropped her policy, she would not have been alone. Far fewer Americans compared with five years ago are paying for flood insurance in coastal areas of the United States where hurricanes, storms and tidal surges pose a serious threat, according to an Associated Press analysis of government data. The center for the problem is South Florida, where Spartz lives. The top U.S. official overseeing the National Flood Insurance Program told AP that he wants to double the number of Americans who buy flood insurance.

“I was talking to my husband and I said that if something like Harvey happens here, I don’t want to be on the hook,” said Spartz, who relocated from Cincinnati. “It isn’t a lot of money to save yourself the heartache if it does happen.”

What’s driving the drop in policies? Congress approved a price hike, making premiums more expensive, and maps of some high-risk areas were redrawn. Banks became lax at enforcing the requirement that any home with a federally insured mortgage in a high-risk area be covered. Memories of New Orleans underwater in 2005 after Hurricane Katrina have faded.

Without flood insurance, storm victims would have to draw on savings or go into debt, or perhaps be forced to sell.

Fewer policies in force

The number of policies in force today has fallen in 43 of the 50 states since 2012, dropping from almost 5.5 million to just less than 5 million, a decrease of 10 percent, AP’s analysis found. In low-lying Florida, where by far more flood insurance policies are sold than in any other state, the drop has been almost 16 percent. In only two states, Hawaii and South Carolina, are at least 50 percent of homes in flood hazard areas insured under the program.

AP’s analysis also showed the percentage of homes in high-risks areas that have flood insurance is sometimes frighteningly low. In Spartz’s home of Broward County, it’s only 13 percent. In Houston’s Harris County, it’s 28 percent. In New Orleans, it’s 46 percent.

Roy Wright, the director of the insurance program, which is administered by the Federal Emergency Management Agency, acknowledges that the decrease is alarming and says he hopes to double the number of policies in the near future. He also wants to persuade more communities to limit construction in high-risk flood zones. Congress is likely to reauthorize the insurance program before it expires Sept. 30.

​Flood insurance debate

President Donald Trump’s homeland security adviser, Tom Bossert, said he expects changes to the flood program to be debated on Capitol Hill later this fall, after the immediate Houston recovery is underway.

“This administration’s been pretty clear that we’d like to see some responsible reforms to the National Flood Insurance Program,” he said Thursday at the White House. “I don’t think now’s the time to debate those things.”

Last year, the program collected about $3.3 billion in premiums and paid out about $3.7 billion for losses. FEMA paid out $3.5 billion per year over the past 12 years, which included Katrina.

“It is about consumer choice. It’s about consumer education. It’s about an education related to flood risk. It’s about communities galvanizing around it. It’s also about communities making choices about how they want to build going into the future so that people are at less risk. When they are at less risk, their premiums are cheaper,” Wright told the AP.

Lax enforcement

One way to compel more homeowners to buy policies would be for banks to enforce the coverage requirement for homeowners with a federally insured mortgage if they live in a Special Flood Hazard Area. Experts said that’s not happening. Many homeowners let the policy lapse after a few years, correctly thinking the bank will not check. Or a bank will sell mortgages to another bank, and paperwork on whether homes require flood insurance isn’t reviewed. About 7 out of 10 homeowners have a mortgage.

“The banks are not watching the hen house,” said Loretta Worters, a spokeswoman with the Insurance Information Institute. “They sell these mortgages from a bank to another bank and to another bank, and whether that home needs flood insurance slips through the cracks.”

In Mississippi, the number of federally insured properties fell by nearly 15 percent, from about 75,000 in 2012 to 64,000 this year. The decreases were even higher in some coastal communities, including Gulfport and Long Beach, cities that took a direct hit from Katrina.

Ned Dolese, president and co-founder of Gulfport-based Coastal American Insurance Co., suspects the drop in Mississippi is largely because of a lack of government enforcement.

“There are no teeth in FEMA or the NFIP to whack you over the head if you, the consumer, don’t renew your flood policy,” he said.

Maps redrawn

FEMA periodically redraws flood-risk maps, moving some homes from mandatory-carry areas to a less-risky category. When the requirement is lifted, homeowners gamble or believe their home is no longer in danger. As Harvey proved, a lower-risk neighborhood is not a no-risk neighborhood.

After the city of Central, Louisiana, successfully petitioned FEMA last year to change its flood maps, it sent letters notifying roughly 2,000 residents that their homes no longer were inside the high-risk zone. Kyle Cutrer didn’t get flood insurance when he purchased a house in Central last summer, outside the flood zone.

Last August, a slow-moving storm dumped an estimated 7 trillion gallons of rainwater on south Louisiana, more than 60 centimeters (2 feet) of rain in some places. The deluge overtopped rivers and damaged or destroyed tens of thousands of homes, inundating many neighborhoods that had never seen such catastrophic flooding.

About 30 centimeters (1 foot) of water washed into Cutrer’s home, causing approximately $40,000 in damage. He used about $16,000 from FEMA to pay for some repairs; he paid the rest himself.

Cutrer said his real-estate agent and mortgage company had both assured him he did not need flood insurance, which would have cost him about $300 annually.

“I was told, ‘You’ll never flood. You won’t have a problem here,”’ he said. “As a first-time homebuyer, I was trying to keep that note as low as possible.”

A week after the flood, he called his insurance agent and purchased a flood policy.

“I’m not going to be able to stop the flood. But if it comes, I’ll be fine,” he said.
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