Hurricane Katrina was a category five hurricane that hit the Gulf Coast; it hit Louisiana hardest and also hit Mississippi.  After the storm, many people saw just how important it is to have flood insurance.

Many insurance companies had to pay millions of dollars in benefits to those impacted by the hurricane in Mississippi. Now residents are finding it much harder to secure flood insurance policies. Insurance companies had to shell out more than forty five billion dollars in claims during Katrina and need to rebuild their funds because a natural disaster can happen at any time.

Flood insurance companies are now assessing properties to gauge how severe of a flooding risk that they have. Statistics have shown that the next five to ten years will have more hurricane activity than previous years.

Katrina was a litmus test for many insurance companies. Many of these companies are now in the red because of the massive influx of insurance claims. Katrina was a huge natural disaster that no one really could prepare their properties for.

Because Mississippi is located on the Gulf Coast, it is more prone to flooding because hurricanes can come right up the coast and slam them hard. Insurance companies are now increasing their premium rates to offset their risk. The state is working with some insurance companies to help and make sure that insurers are not paying too much for coverage.

Many residents feel like they are being punished because of Katrina and he claims that they had to file after their homes were damaged or destroyed. Many homeowners could not afford flood insurance premiums after Katrina and eventually had their homes foreclosed on.

The economy suffered a lot of losses after the Hurricane. Many businesses were destroyed and the job outlook has been very bleak.

One issue many residents face is access, the state has created a wind pool for people who have been denied insurance on the open market. The pool charges people premiums based on where they reside. For example, those people who live directly on the beach will pay the highest premiums. Currently, forty five thousand properties have become insured by the pool and more might join if this year is a bad hurricane season.

More than ninety percent of the properties in the pool are homes and they are worth less than three hundred thousand dollars. After the hurricane, policy holders in the pool saw their rates increase by about ninety percent. The rates are expected to stay the same for the next two years.

Mississippi residents hope that the government will be able to construct better levees and supports systems so that property loss is less severe in future incidents. Homeowners will have to carefully examine where they build their homes and where they move to. Moving to a higher risk flood zone means higher flood premiums so it is important to do your homework before buying a home. Sadly, people who live in the Gulf Coast have to accept that location is everything and that living in a flood prone area is going to cost more money.

Source: McClatchy Newspapers