3OYS: Flood insurance leaves some homeowners 'high and dry'

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By Christina O'Haver By Christina O'Haver
By Christina O'Haver By Christina O'Haver
By Christina O'Haver By Christina O'Haver
By Christina O'Haver By Christina O'Haver
By Christina O'Haver By Christina O'Haver

PHOENIX -- When it comes to our recent weather, it's been a doozy.

Many homeowners have had to cope with massive cleanups and repairs. Some suffered out-of-pocket expenses while others relied on insurance -- insurance that wasn't there when they needed it.

"That water was so powerful it actually blew that whole complete wall completely down," Dane Palmero said.

Palmero wasn't too worried when the floods pushed his wall down. After all, he was insured. At least, he thought he was insured.

"We're canceling our flood insurance," he said. "We don't need it anymore because it’s not doing any good."

Palmero owns a pool repair company and recently told 3 On Your Side viewers the best way to whip your pool back into shape following the floods.

But now, Palmero is back on 3 On Your Side -- this time as a frustrated consumer, who says his flood insurance turned out to be a joke.

"All the damage that happened around here was 100 percent caused by a flood, but they won't cover it because the flood insurance will only cover your main dwelling," he said.

My shop over here got filled with 1 foot of water in it and 4 inches into the apartment," he said.

Palmero pays $400 a year for a flood insurance policy with American Family Mutual.

"It's written by the government, by FEMA, and it's one premium, one coverage," he explained.

But look at the small print, and FEMA’S National Flood Insurance Program lists what's covered and what's not covered.

"The flood insurance policy does fall under the FEMA guidelines. It is offered through the federal government and sold through private insurance companies," said Chelci Vaughan.

Vaughan is with the Allstate insurance company, which has nothing to do with Palmero's problem, but she says having flood insurance is still a good idea.

"A lot of people don't realize that they're actually in a flood zone. Everybody's in a flood zone," she said.

But Vaughan says homeowners are now finding out the hard way that they need additional coverage to their policy to repair or fix certain things.

"Those are things like guest houses, detached garages, sheds -- things like that." she said.

And that's Palmero's problem. His wall that fell down was not attached to his home and as a result, it's not covered. He says he wishes he knew that little bit of information before he ever purchased the policy.

"It’s horrible," he said. "What really frustrated me even more is my insurance adjuster didn't tell me."

For additional information, visit: www.fema.gov/national-flood-insurance-program.