Insurance Coverage Blog

I first wrote about this issue last year in a post called Why Don't People Pay Attention to Flood Warnings? Sacramento, California is having a mail-in vote on whether to tax itself to fix parts of the levees that keep much of the city from flooding from the Sacramento River.  But as I pointed out in my post last year, residents are receiving contradictory messages: the state passed a $4.1 billion bond measure last year to strengthen the state's levee system, and many residents have received information from their insurance companies that, as a result of some fixes to the Sacramento levees, they no longer need flood insurance.  

Something that caught my eye is the letter from the insurance companies saying the residents don't 'need' flood insurance, I think the word should be 'required'. I'm not sure what the legal difference is but as a former resident of the area, I can tell you that you might not need it but I wouldn't be caught dead without it.

Andrew, what's really fascinating about flood insurance is that a lot of people purchase it, but overall the rates of people who have flood insurance in high-risk zones is very low. As I talked about in the prior post I cited, even when there are warnings that rivers will crest and people should get flood insurance, most don't. They look at other signals, such as that their neighbors aren't getting flood insurance, and chose to view those as more trustworthy indicators.