Many Harvey flood victims are inadequately insured
As if the victims of tropical storm Harvey haven’t suffered enough, many are in for more troubles once things have dried out. According to insurance experts, most in the Houston-Sugarland-Baytown area do not have adequate flood insurance, leaving them on the hook for the cost of any losses and repairs.
"All these people taken out in boats, they have a second problem: They have no insurance," said Robert Hunter, director of insurance at the Consumer Federation of America.
The lack of insurance in the affected areas means that many will be paying the costs to fix damages and replace possessions out of pocket, a cost that can climb extremely high. Hunter estimates that total out of pocket costs for flooded homeowners could reach $28 billion US, the largest in US history. Fixing water damage in walls and floors or replacing couches and electronics could put families into more debt than they are already in, forcing some to sell or leave their communities.
Hunter said that homeowners without flood insurance may have the ability to apply for federal disaster relief benefits, but this type of aid comes in the form of low interest loans, a burden for those already struggling with too much debt.
"If you have $30,000 in damages, you can get maybe $25,000," said Hunter. "But there will be interest, and then you have your mortgage. You'll have two loans on your house.”
The nation’s biggest mortgage lender, Wells Fargo, announced on Monday that they will be suspending all negative reporting to credit bureaus, collection calls, and foreclosure procedures until the end of September for customers who have been affect by Harvey. Additionally, Wells Fargo is offering 60-90 day disaster relief for costumers, and further relief on a case-by-case basis.