Few residents in the areas of southeastern Minnesota hit by flash floods last weekend had flood insurance on their homes. In the two hardest-hit counties -- Winona and Houston, total population 70,000 -- only 196 flood insurance policies have been issued for homes and businesses, according to the Federal Emergency Management Agency.
Insurance experts are predicting that many homeowners in the area who had homeowners insurance but not flood insurance will end up defaulting on their home loans. The cost will be absorbed by lenders, and the homeowners will have their credit ratings adversely affected by the defaults.
There are laws on the books that provide residents in especially flood-prone areas financial incentives to move away or elevate their homes. As the cost of rebuilding Minnesota’s flooded areas starts to mount, banks, mortgage lenders and insurers could start lobbying for compulsory flood insurance in areas such as southeastern Minnesota. Should homeowners in such areas, where floods are severe but rare, be legally compelled to own flood insurance?
Showing posts with label mortgage. Show all posts
Showing posts with label mortgage. Show all posts
Wednesday, August 22, 2007
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