Cleaning Up After The Floods

Margaret Atkins MunroLet's Talk About MoneyLeave a Comment

While no one will ever mistake The Great Vermont Flood of 2011 for the biblical deluge, its stories will be told, and its effects will be felt, long after the waters recede. In the meantime, the damage reports are still being tallied, and we may never be able to put a precise price tag on all that has been lost.

Here is where we currently stand: on June 13, 2011, the Vermont Emergency Management Agency was estimating that damage to public infrastructure exceeded $15 million, primarily in the counties of Addison, Chittenden, Essex, Franklin, Grand Isle, Lamoille, Orange and Washington. And, as of June 12, 2011, President Obama, whose vision seems to be more focused on the disasters in Alabama, Missouri, and other parts south and west, had still not declared the State of Vermont, or any county in it, a federal disaster area.

Remember, these are just the numbers for public infrastructure, for roads, bridges, water treatment plants, and the like. These numbers do not begin to address the catastrophic private costs. On this, I can speak from personal experience.

On April 28th, my basement flooded. I did have a sump pump, but during the small hours, it failed. When I arrived for work at 6:15 AM, I stepped into thousands of gallons of water.


Not my house

Seven weeks later, my new sump pump is still chugging away, the floor is still ruined, the baseboards are still patiently waiting to be reattached (but only after a new floor is installed, so it could be a while), and I’ve paid the almost $2,000 bill to have the basement dried out. Every time it rains, I pray to the sump pump god, and when my husband says that we could use a little rain because the garden is looking a bit dry, I throw him dirty looks.

Fortunately, although I did not know it at the time, I had sump pump insurance which covered some, although not all, of the total cost of cleanup and repair. The vast majority of people whose basements (or more) have flooded have no insurance coverage. The rule is that typical homeowners or renters insurance only covers waters that come from above, not those that seep in from below. So damage from an ice dam or a roof ripped off is covered, but damage from rising groundwater is not.

The only exception to this rule is if you have purchased specific flood insurance, which private insurers do not offer except through the National Flood Insurance Program. And, since most of us do not live in areas that are designated as flood zones, most of us don’t even think to purchase this, even though we may be eligible to do so.

I believe that flood insurance, which is provided through a federal program, remains off our radar because insurance agents do not profit from selling it; those required to have it are homeowners who live in a recognized flood zone. As a result, our cumulative and personal losses from these particular floods are devastating. There are, however, a couple of financial opportunities that may help to mitigate your losses.

The first is that, to the extent that you itemize your deductions and your personal losses exceed 10% of your adjusted gross income, you may be eligible for a casualty loss deduction on your 2011 income tax return; 100% of business losses will be deductible from business income.

The second is that, if and when President Obama does declare Vermont, or any part of it, a federal disaster area (and this could take additional weeks or even months), there may be outright federal grants available to businesses and individuals to assist in rebuilding, as well as more advantageous tax treatment of rebuilding costs. In the event that Vermont is not declared a federal disaster area, it will still most likely qualify for a disaster declaration from the Small Business Administration (SBA), which provides low-interest loans to assist homeowners, renters, and businesses.

Finally, it is not too late to purchase flood insurance to prevent future loss. After the events of last winter and spring, none of us can reasonably say that flooding of this magnitude can only happen once; climate change, whatever its source, is altering the rules. There is a 30-day waiting period after you purchase coverage before it kicks in (unless you are in a declared flood zone, in which case you probably already have flood insurance.) Go to to find out which agents in your area offer flood insurance, and then get a quote. It would be difficult for any of us to quibble at the cost of additional insurance in the face of the size of the clean-up costs we’re currently footing.

For most of us, we took a chance and self-insured, trusting in the day we hoped would never come; sadly, it did. There is little that we can do to diminish the loss and anguish of recent events, but there is a great deal we can do to make sure it never happens again.