By Chris Churchill, Times Union, Albany, N.Y.

Aug. 31 — SCHENECTADY — Residents facing flood damage from Tropical Storm Irene may be shocked to learn that few home insurance policies will cover the cost of repairs.

Home owners and renters insurance will usually cover damage from high winds. But damage from rising and rushing water — as seen in Irene-ravaged communities across upstate New York and New England — is generally covered only by flood insurance.

And that’s protection few owners or renters have.

Indeed, data from the National Flood Insurance Program show only 99 flood insurance policies in effect in the entire city of Schenectady, for example, at the end of June.

The coverage is apparently limited even in more flood-prone city neighborhoods like the Stockade, where waters rose in Irene’s wake.

“Ninety percent of the neighborhood, I would say, does not have flood insurance,” said Joe Fava, a longtime resident and REALTOR® who formerly headed the Stockade Association neighborhood group.

Capital Region residents who lack flood insurance would gain access to at least some help with Irene-related repairs if area counties are declared federal disaster areas. That would allow residents to tap grants and low-interest loans from the Federal Emergency Management Agency.

Standard home owners and renters insurance will cover water damage if a tree crashes through a roof during a storm and allows rainwater to stream in.

But the private insurance industry considers flooding too difficult to predict, so it leaves most flood coverage to the national program backed by the federal government.

The National Flood Insurance Program, launched in 1968, has been the subject of heated congressional debate in recent years, largely because Hurricane Katrina left it $18 billion in the red.

Congress, unhappy with the program but unable to agree on a permanent fix, has repeatedly decided to temporarily extend the program, which will expire on Sept. 30 without another extension. (The expiration wouldn’t affect the repayment of claims from existing damages.)

Irene-related damage, with claim totals expected to rise over $1 billion, is likely to put the flood insurance program on even shakier financial footing.

Yet despite its struggles, the federal program is credited with making flood insurance more affordable. The average policy costs around $600 per year, and can be considerably cheaper in low-risk areas.

Still, most home owners, perhaps believing that traditional home owners insurance will coverage flood costs, forgo the coverage: A recent poll by Insurance Information Institute, an industry group, found that only 5% of home owners in the Northeast have flood protection.

“Americans in general underestimate the flood risk, particularly in inland communities,” said Michael Barry, a spokesman for the institute.

Home owners in neighborhoods considered flood risks by FEMA are required to buy the insurance as a condition of their mortgage. Such requirements have boosted coverage in cities like Troy, where there were 641 flood insurance policies in effect at the end of June, according to federal data.

Some, however, consider FEMA’s flood maps inconsistent. They say the agency requires insurance in some neighborhoods unlikely to flood and doesn’t mandate it in areas where water rises more often.

South Troy resident Ian White was chagrined to learn he’d have to purchase flood insurance as he and his brother purchased a First Street building in 2009. White, a geologist, said the neighborhood has rarely flooded.

White pays about $2,200 annually for flood insurance. His building wasn’t damaged by Irene, but the storm has caused him to reassess his initial reluctance. “I am thankful I have flood insurance,” he said Tuesday. “I still feel I pay too much for it, though.”

Staff writer Cathy Woodruff and the Associated Press contributed to this story. Reach Chris Churchill at 454-5442 or cchurchill@timesunion.com.
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