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Homeowners (and Taxpayers) Face Billions in Losses From Harvey Flooding


Hurricane Harvey may inflict as much as $30 billion in damages on homeowners, according to preliminary estimates. But only 40 percent of that total may be covered by insurance — and of that, the federal government will bear the biggest liability.

Private homeowners’ policies generally cover wind damage and, in certain cases, water damage from storm surges. But for almost half a century, all other homeowners’ flood coverage has been underwritten by the National Flood Insurance Program, a federal program that itself faces financial uncertainty.

Flooding has dealt the hurricane’s biggest blow. And in areas where it is prudent — or even obligatory — to buy it, having flood coverage is the exception rather than the norm.

Homeowners in areas designated as 100-year flood zones are required to hold policies from the federal program. But in practice, the requirement is difficult to enforce and most people — including in eastern Texas — fail to buy coverage or let their policies lapse by not keeping up on the premiums.

“It’s a pretty cheap buy,” said Charles C. Watson Jr., a founder of Enki Holdings L.L.C., a data analytics firm for natural disasters, who offered the $30 billion estimate for the overall damage to homes. (CoreLogic, a firm that analyzes real estate and insurance data, estimated that private insurance would wind up covering from $1.5 billion to $3 billion.)

Mr. Watson, who lives in what he believes to be a flood-prone area of South Carolina, said only he and a couple of his neighbors had flood coverage, even though the premiums are far lower than the cost of potential claims.

The Federal Emergency Management Agency issues maps showing 100-year floodplains, and bases flood insurance rates on those. The maps provide good data on where storm surges may hit, or rivers may overflow their banks, said Carolyn Kousky, director of policy research at the

“But what they don’t handle well is when a downpour overwhelms a local storm-water drainage system,” she said. That is what is now happening in the Houston area, “on a scale that’s never been seen before,” she said.

That means many homeowners with water now up to their knees, or higher, were never required to buy flood insurance, because their property was not listed as being on a 100-year floodplain.

Harris County, which includes Houston, started using new floodplain maps from FEMA in January. The maps added about 8,000 parcels to the agency’s Special Flood Hazard Areas, meaning those properties have a better than a one-in-four chance of flooding at some point during a 30-year mortgage.

Local authorities in Houston worked with FEMA to get the word out about the need for flood insurance, but it was a hard sell. And now that there is a flood, it is too late to buy it.

People without coverage will have to apply for grants or low-cost loans from other branches of the federal government, said Loretta Worters, a spokeswoman for the Insurance Information Institute. That means delays in receiving funds, if such requests are even approved.

A FEMA spokeswoman said the agency would have National Flood Insurance Program claims statistics for Harvey later this week.

The National Flood Insurance Program was created in 1968, after most private insurance companies stopped writing homeowners’ flood coverage because they could not charge premiums high enough to cover the potentially catastrophic costs. (In addition to wind and limited storm-surge damage, private insurers cover vehicles caught in flooding.)

The 49-year-old program is now run by FEMA. Its coverage has caps: $250,000 for a house and $100,000 for its contents, and $500,000 apiece for a business building and its contents. Larger companies can still buy flood coverage through commercial insurers.

Few in Houston Have Flood Insurance

Only about 15 percent of homes in Harris County, Tex., which includes Houston, are covered by the National Flood Insurance Program.

Harvey image

And even though the insurance is capped, the flood program’s finances have been shaky since 2005, when it lacked the resources to pay for the record-setting claims of Hurricane Katrina, and had to borrow $17 billion from the United States Treasury.

The program has not been able to pay back that debt — in fact, it has had to borrow even more, just to pay the interest on its existing debt, and to pay additional storm claims. It now owes the Treasury $24.6 billion.

Hurricane Harvey will almost certainly lead to further borrowing — but the program has only $5.8 billion left in its existing line of credit with the Treasury.

The program runs on five-year authorizations by Congress, the latest of which will expire on Sept. 30. If Congress does not reauthorize the program, its ability to borrow from the Treasury will be drastically reduced.

Congress has held hearings on the matter and is considering several possible remedies, including simply extending the program temporarily. Lawmakers have occasionally granted such extensions in the past.

“I think all stakeholders are in agreement that the worst thing there could be is a lapse of the program,” Ms. Kousky said. FEMA normally works with mortgage lenders to enforce its flood-insurance requirement, but when the program’s authorization lapses, home sales cannot close.

“It just creates havoc in the housing market,” she said.

This year, there is an added complication: The flood insurance program’s expiration roughly coincides with the possibility that the Treasury itself will run up against its legal debt ceiling, something that could happen in the first two weeks of October. Federal borrowing has itself become contentious, with some debt-averse members of Congress threatening to fight any increase in the government’s borrowing limit.

“We’ve got all this other stuff going on, and now is not the time to figure out how to reform the system,” said Mr. Watson, the data analytics expert. He added that he thought the flood-insurance program was in dire need of reform, however, calling it “the most frustrating, screwed-up system you can imagine.”

What do you do?

The question “What do you do?” has basically become synonymous with “Who are you?” There’s a reason it almost always follows “What’s your name?” in polite conversation: It’s helpful. It’s get-to-know-you shorthand. The one-word answer to “what do you do?” allows people categorize us and gives them a snapshot of what we do or who we are.

But there’s also a dark underbelly to introducing ourselves with this kind of shorthand: When labels go wrong, they can lead to stereotypes. Perception becomes more about the experiences accumulated by the people you’re talking to than anything that they may or may not know about you, personally.

For example:

You Say: I’m in sales. They Think: You’re a pushy, sweet-talking charmer.


You Say: I’m a lawyer. They Think: You’re the argumentative type.

You Say: I’m an accountant. They Think: You’re a numbers geek.

Maybe I’m being a little harsh, but you get the picture; odds are, whatever quick description you’ve used in the past barely does what you do—or who you are—any justice. But everywhere from networking events to family gatherings, this question is going to live on. So you need to find a way to explain your job in a way that it makes for an energizing conversation starter, instead of a fast track to the pigeon-hole.

Here are seven ways to reframe this common question to help you come up with a more compelling answer. Experiment with different ones during conversations in the next couple weeks to see which allows you to represent yourself the best and build more meaningful relationships.

  1. Talk About How You Help People

You might be, say, a copywriter. Or you might be someone who helps companies tell compelling stories about their brands. And doesn’t that sound infinitely more interesting? I’ve used this at dinner parties to great effect: It instantaneously removes stereotypes about your job title and explains the value you bring to the table. Start your next response with “I help people…” and see where the conversation takes you from there.

  1. Tell an Anecdote About Your Job

Narrative is always compelling. It helps us make connections. A study out of Princeton University found that the brain activity of the storyteller and the listener actually begin to mirror each other, despite the fact that one person is talking and one is listening.

And best of all, to solve the “What do you do?” problem, you get to provide context for the person you’re talking to, instead of relying on the picture they have in their minds of what you do.

When implementing this strategy, you might have to use your job title as a segue, but transition immediately into a story about something that was fun or inspiring to you at work. For example, at a recent party I told someone I was a communications consultant, but then followed up with a story about a client that offered context for my work and illustrated the need in the market for what I do.

  1. Make it a Teachable Moment

Think about your answer in this light: You are educating the other person on the subject of you. So instead of just saying your title, explain something he or she might not know about your work or industry. Talk about the void in the market that you are filling. Talk about the latest thing happening in your industry. Talk about the most interesting thing you’ve learned lately.

  1. Be Vulnerable

Don’t be afraid to get personal and talk about your journey. What led you to where you are today? What are your dreams for the next phase of your career? Every conversation is building a relationship. To do this effectively, you need to let people behind the curtain, even just a little, so they understand where you are coming from.

  1. Be Relevant

It’s not all about you, even when it is. Relay the details about you and your work that are relevant to the person you’re talking to. The client whose story I told at the party was also finishing up successful rehab after a car accident, and as I told it, I saw the cardiac rehab therapist’s face light up with recognition. Think about what experiences you have that will resonate with the people you’re talking to or be able to help them out in some way.

  1. Let Your Freak Flag Fly

Find something about what you do that really lights you up, and focus on that. When you show how enthusiastic you are about something, you are a magnet. People actually really want to be around that. Don’t let anyone tell you to take a chill pill. Ever.

  1. Be Self-Promotional

We need to rebrand self-promotion. We need more people who can speak frankly about the value they bring to the clients and organizations with which they work. Wouldn’t the world be a better place if everyone just let down the veil and really opened about what they are good at? More people would be doing things they love. We would, collectively, be happier.

So, don’t be shy. You’re actually doing everyone a favor by being honest about what you’re good at and what lights you up. And you can plainly see how much better that is than saying “I’m an accountant” the next time someone asks.

“What do you do?” may forever be synonymous with “Who are you?” but with one of these alternative answers, you have a say in who you get to be in the mind of the person you’re talking with.

In The News: Harvey & Vacation Rentals

Vacation Rentals Turn Into Shelters in Harvey’s Wake

By John L. Dormansept of the NY Times

The six-bedroom home in an affluent neighborhood of New Orleans has everything a vacationer would want in a rental: tasteful décor with old-world touches like a clawfoot tub, a saltwater pool and a deck that would tempt even an inexperienced griller to try to char a nice dry-aged rib-eye. It goes for $750 a night this time of year on Airbnb.

But the property, a couple of hours away from flood-soaked Lafayette, La., is now available at a steep discount: it’s marked down 100 percent.

Nearly 1,100 homes and rooms are being offered for free to evacuees of Hurricane Harvey through vacation rental sites, making the hosts unlikely operators of mini-shelters at a time when tens of thousands are displaced in Texas and Louisiana.

The bulk of the free listings — about 1,000 — are on Airbnb. And in a sign that the site, which started out as a freewheeling peer-to-peer exchange, has grown up, the city of Houston is relying on it to find emergency medical workers a free place to stay as well.


Airbnb’s listings are not a spontaneous effort. The vacation rental and hospitality company first created a disaster relief plan to allow people renting properties to offer free lodging for evacuees after Hurricane Sandy in 2012. This time around, hosts in Houston, Galveston, Corpus Christi, New Orleans, Baton Rouge, Shreveport, Lake Charles, and Lafayette can offer free stays to hurricane evacuees through the site through Sept. 25. Because the site does not manage the properties it lists, it can only ask its hosts to offer free lodging.

“We have since helped in 75 disasters internationally including Hurricane Matthew and wildfires in California,” said Kellie Bentz, the head of global disaster response and relief for Airbnb. “But Harvey is the most significant.”

The hurricane marks an interesting turn of events for Airbnb. It has gone from being a site that several cities, including Austin, have sought to prevent or limit from operating in their municipalities to one that is working with public officials in Houston. It is also currently responding to flooding in Mumbai, where intense rains and flooding killed at least five people in a single day last week.

If the site successfully positions itself and its hosts as philanthropic partners to aid in disasters, it will eventually face questions about which emergencies qualify for the $0 lodging rate and what doesn’t.

Harvey is unquestionably a disaster of epic proportions. The demand is no less acute even though the floodwaters have ebbed. In many cases, receding waters have only revealed the scale of the devastation. Some evacuees returned home to find that they lacked safe drinking water or basic necessities. And some who rode out the storm have since left because it is no longer safe to remain.

Gabbie Vasquez was one of them. After the storm made landfall, she left her home in Angleton, Tex., along with her boyfriend and 6-year-old son because she worried that she would lose power. They stayed in a hotel for two days and planned to return home but the roads had flooded.

So they met up with other family members at a McDonald’s in Waco and tried to come up with a game plan. “We’re thinking to ourselves, ‘What are we going to do now? Where are we going to go?’”

While the kids were playing, they started looking online. A Facebook post led her to Airbnb, where she saw a listing that said: “Mi casa es su casa” or “My home is your home.”

She clicked and found her way to the home of Edith Flores, an Austin resident and first-grade teacher who is a single mother to three children. Ms. Flores usually charges $80 to $100 to stay in her guesthouse, and $50 for the garage loft. But in the wake of Hurricane Harvey, she is listing her accommodations for free.

 “I personally don’t have the financial funds to donate as much as I’d like to,” she said. “This is one thing I can do.”

Several other hosts said they had also found quick takers. Heather Ayrer, a stay-at-home mom who lives in a three-story townhouse in the Midtown neighborhood, has been a host for two years and generally charges $78 a night for a bedroom and bathroom space with a private entrance. When she offered her home to Harvey evacuees for $0, the response was overwhelming.

“I was immediately flooded with 15 requests from people who needed help,” she said. “My entire September is booked solid with different people involved in Harvey, including an electrician who is coming into town to help with power restoration in the city.”

HomeAway, the Austin-based marketplace that focuses on vacation rentals, has a smaller number of listings than Airbnb, roughly 100. It has created a number of services for those affected by the hurricane, including a specialized page for temporary housing and a dedicated line for reservations. It draws upon its inventory from HomeAway as well as the other sites it operates: VRBO and During this time, service fees will be waived from any rentals for evacuees or emergency medical workers.

The sites each contain plenty of listings at higher price points, but there is no evidence of price gouging, Airbnb said. Many of those listings, like one home listed for $2,500 a night, are vestiges of sunnier times. The two-bedroom home in the Heights District boasts: “Great Super Bowl Weekend Rental!”

Rediscover Your Inspiration at Work

By: Kristi Hedges

When we’re inspired, our work hums. We have a sense of purpose, buoyed by the feeling that our talents are being put to good use. We’re doing what we should be doing. And then, just like that, inspiration evaporates. Perhaps a negative comment from your boss deflated you or you’re not excited about a particular assignment. Inspiration can be frustratingly fleeting and difficult to recover when lost. Even if you’re lucky enough to have a job you love, it’s common to go through lengthy periods where you need to dig deep to feel excited about your work.

I’ve coached many executives in the thick of this morass and they often struggle to understand the cause: is it the company? Or a particular set of circumstances? Or is it them?

inspirationPsychologists Todd Thrash and Andrew Elliot have been studying inspiration for decades. They’ve identified three elements that occur when we’re inspired: we see new possibilities, we’re receptive to an outside influence, and we feel energized and motivated. Fortunately, inspiration is not a static state of mind but a process that we can cultivate. While we can’t force ourselves to be inspired, we can create an environment that’s conducive to inspiration. Here’s what I’ve seen work for my clients.

Don’t wait for positivity to strike. When you aren’t feeling inspired, it’s normal to feel stuck. But inaction is your enemy in this effort. Inspiration doesn’t just happen while we’re at our desks returning emails. Don’t wait for a flash of insight to strike before making any changes. The field of cognitive behavioral therapy shows that our behavior affects how we think and feel. When we do different things, we feel different feelings.

Waiting to act reinforces stasis. Instead, understand that any move you make will open up new possibilities and reveal emotions that you can’t yet see. And remember that you often have more control over your work environment than you typically think.

Develop an inspiration routine. When you’ve excelled in your field, it’s natural to move out of learning mode. But researchers have found that when people believe that they’re experts they become more close minded, a concept termed earned dogmatism. We’re most likely to get, and stay inspired, when we have fresh experiences and information that can trigger insights.

There are lots of ways to gather these – take a class, read a book, attend professional gatherings, travel. It’s best to pick one that works for you and then structure your time to integrate these actions into your routine. You might commit to traveling once every six months or take a few hours every Friday morning to read articles and books or set a goal to meet three new people in your field each quarter. Bill Gates was known for having a twice yearly think week, spending full weeks away from his office, reading and mapping new ideas. For most professionals, this isn’t possible but devoting even a couple hours a week to perspective-expanding activities will help you stay engaged and interested.

Find new friends. The people we spend time with affect our energy and our mood. They also tend to reinforce our beliefs. We can easily get into a situation where we speak to the same people about similar topics, week in, week out.

Get out and meet new people. Make a concerted effort to find thought partners and guides who are doing different things from you. Role models are inspirational because they allow us to learn vicariously through their experiences. They stimulate new ideas, and provide a glimpse into the future.

Having role models who are a few years or levels ahead of you can help you rethink your own situation and what’s possible for yourself. Make a list of people who have qualities that you admire. Aim for a few qualities rather than perfection. You don’t need to establish a formal relationship with your role model. It’s fine to observe and learn from them from afar. They don’t even need to know that they’re serving that function.

Narrow your choices. Sometimes we lack motivation, because we’re not sure what to do – stay in a job, leave for a different one, try out a new career, move departments, ask for a promotion. Too many options are paralyzing, as psychology professor Barry Schwartz discusses in The Paradox of Choice. Too often, we feel overwhelmed and do nothing.

We can boost our motivation by narrowing down our options, making it easier to act on them. We like to know we have a plan and are working toward it. If you feel stuck, try writing down all of your options and selecting the three you’re most excited about in order. Then allocate time to work toward your top choices.

Inspiration doesn’t have to feel elusive. It’s in your capacity to increase your opportunities for new insights and ideas. As Jack London said: “Don’t loaf and invite inspiration; light out after it with a club, and if you don’t get it you will nonetheless get something that looks remarkably like it.”

Activation of NFIP Claim Payment Process for Hurricane Harvey

Federal Emergency Management Agency (FEMA) has released a memo stating it is activating the National Flood Insurance Program (NFIP) enhanced claims payment process.  You can read the full bulletin here:

Hurricane Harvey has caused widespread and ongoing flooding in Texas and Louisiana. Due to the catastrophic impacts of Hurricane Harvey to National Flood Insurance Program (NFIP) policyholders, the Federal Emergency Management Agency (FEMA) is activating the NFIP’s enhanced claims payment process.

I. Authorization of Certain Payments Without a Proof of Loss Pursuant to my authority under the Standard Flood Insurance Policies (SFIPs) and FEMA’s regulations, I am conditionally waiving the proof of loss requirement in the case of a Harvey loss and directing you to exercise your option to accept an adjuster’s report to pay a claim. Additionally, I am waiving the requirement that the policyholder must sign the adjuster’s report.1 To issue payments under this conditional waiver, WYO Companies must provide policyholders with the following:

1. A copy of the adjuster’s report supporting the claim payment;

2. If the payment is less than the adjuster’s report, a written explanation of the difference; and

3. A letter in the form and substance of the template attached to this bulletin (Adjuster Report Claim Payment Letter).

This conditional waiver does not alter a policyholder’s ability to submit a proof of loss seeking supplemental payment.

II. Proof of Loss Deadline Extension To allow enough time for policyholders to evaluate their losses and the adjusters’ reports, I am waiving the sixty (60)-day proof of loss deadline requirement. The deadline for submitting a compliant proof of loss for Hurricane Harvey is 365 days (one year) from the date of loss.

III. WYO Companies Must Issue Payments As Soon As Practicable Notwithstanding the deadlines for paying claims in the FIPs, I am directing WYO Companies to pay claims more quickly.

IV. Applicability This bulletin applies to all NFIP claims associated with the following FICO numbers: • 682 (Texas) • 683 (Louisiana)

V. Authority This bulletin is authorized under 42 U.S.C. 4019(a); 44 CFR §§ 61.13(d), 62.23(k); SFIP Dwelling Form, Article VII.D; SFIP General Property Form, Article VII.D; SFIP Residential Condominium Building Association Policy Form, Article VIII.D; WYO Financial Assistance/ Subsidy Arrangement, Article II.G.1.


FEMA Extension of Grace Period

FEMA has released a memo regarding National Flood Insurance Program premiums in response to Hurricane Harvey.

“FEMA is extending the renewal grace period from 30 days to 120 days. This grace period extension applies to all policies in the affected counties with expiration dates on or between July 24, 2017 and September 22, 2017. An analysis of the number of contracts and policies expiring each day of the grace period shows that a maximum of 92,016 contracts and 97,120 policies could take advantage of this extended grace period, with a maximum deferred income from premiums and fees of $70,171,705.”

Read the full bulletin here:


Emergency Preparedness

As Hurricane Harvey continues to devastate Houston and other parts of Texas, we are reminded that emergency preparedness and effective communication is key during natural disasters and other emergencies.  Does your community have a way to communicate with the affected associations should disaster strike?  Do you have a customer service line, a dedicated web page, remote staff?  How have you prepared key emergency and non-emergency information to serve your association?  Please share in the comments section.