What every consumer needs to know about flood insurance in the wake of Hurricane Harvey

Eight in 10 homeowners who have already endured Harvey’s wrath may be in for another hit after the floodwaters drain and they realize their insurance won’t cover their claims, insurance experts say.

Only 15 to 20 percent of homeowners in Houston and Corpus Christi, Texas, are insured for flooding, according to a state insurance group.

The rest of the flood victims will be out of luck — and many homeowners with large mortgages might simply abandon their homes, as happened after Hurricane Katrina in New Orleans, says Robert Hunter, a former Texas insurance commissioner who is now the director of insurance for the Consumer Federation of America.

Hunter cited three big misconceptions consumers have about flood insurance:

“It won’t happen to me.” Homeowners mistakenly think that because they’re on higher ground or not beside a river, they’re protected. Not so, says Hunter.

“I’ll get money anyway.” Many people avoid buying flood insurance because they assume that if a really big storm hits, federal disaster aid will cover their damage. Hunter says a typical disaster grant is only around $5,000; anything more is a low-interest loan that the homeowner must pay back.

“My homeowner’s insurance will cover it.” Typical homeowner’s policies don’t cover flood damage at all, Hunter says.

Homeowners must purchase flood insurance if they’re in a high-risk flood zone and have a federally insured mortgage. But after a catastrophic storm like Harvey, it’s instantly clear why flood insurance is crucial even for lower-risk properties.

Less obvious is what will happen to the National Flood Insurance Program, which was having well-publicized troubles even before Harvey hit, with a deficit of more than $25 billion.

Congress is likely to extend the program at least temporarily and provide extra money for Harvey claims. After that, lawmakers will need to decide where the program goes from here and whether private insurers who previously abandoned the market should be allowed back in.

For consumers who bought a flood policy or are claiming wind damage, it’s important to act quickly. Check out FloodSmart.gov and follow these tips from the Consumer Federation of America:

Report your damage claim promptly. Be sure to write down your claim number and keep receipts for any immediate repairs you need to make to secure your home, along with any living expenses you incur. (Check your policy to see what’s covered.)

Make as thorough a list as possible of all the possessions you lost, and compile photos of these items. Friends and family members may have photos as well, from holiday celebrations or other occasions at your home.

Photograph the damage, but only if it’s safe. Don’t climb on your roof. The insurance adjuster should take photos too.

Beware of fly-by-night contractors who offer to repair your home. Scammers always descend on disaster scenes. Find out who your insurer uses for repairs or call your trusted contractor.

As the process winds on, keep a file of all your contacts, noting the date, the time and what was discussed.

If an insurance settlement offer seems low, ask for the policy language that it was based on. If you feel it was unfair, you can appeal it, complain to your state insurance department or consider hiring an attorney.

If you have a problem with a flood insurance claim, you’ll have to deal with FEMA. Go to www.fema.gov/flood-claim-appeals-and-guidance

Finally, read your policy carefully to see what it does — and does not — cover. During a massive Texas flood in May 2016, Micky and George Hartz found their Magnolia neighborhood under 6 feet of water, with their home taking in some of that.

“It did just enough damage that we had to knock out walls,” Micky Hartz told ABC News after the flood, when they turned to the ABC News Fixer for help with their claim. “The water came up really fast and left really quick.”

The Hartzes had flood insurance, but the home had a detached garage that was not covered under their policy.

“It was over $85,000 just to fix our house. But the garage, because it wasn’t attached to the house, it was over $20,000 worth of damage that we had to put out for that.”