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Houston's Poverty Rate Will Rise If Insurers Do Nothing

According to 2016 Census Bureau data, the poverty rate in Houston was nearly 21 percent last year—and nearly 33 percent among minors. Texas has the highest rate of low-wage jobs in the country, so despite a rising median income, most poor people in Houston were employed. The side effect of an event like Hurricane Harvey is more than about destroyed homes or lack of insurance. It stresses and stretches the inequalities that already existed, but to harsher degrees.

For instance, lower-income households will be the first victims of higher insurance premiums—both for homes and vehicles. Insurance providers extended their block on new sales of auto policies in affected regions, even 10 days after the skies about Houston cleared. Restrictions were shortly lifted for high-income households buying brand-new cars, but mid- or low-income buyers have been left without vehicles for over a week after the end of the storm. For workers who need to drive to their jobs, a week without a car is potentially ruinous.

Rebuilding Efforts Hindered by Poverty

Property analytics firm CoreLogic predicts that up to 70% of Hurricane Harvey damage will not be covered by homeowner’s insurance. For many families, rebuilding will require long wait times (which many families cannot afford), or incurring hundreds of thousands of dollars in debt—which, again, middle-income households cannot afford.

Flood insurance claims are even less likely to provide sufficient relief. The National Flood Insurance Program has not yet recovered from Hurricane Katrina 12 years ago—it is still $25 billion in debt to the U.S. Treasury, and experts believe Hurricane Harvey could outstrip the cost of Katrina. Specifically, the cost to homeowners could exceed $30 billion, $18 billion of which will fall onto homeowners.

Insurance companies will fight tooth and nail to limit their payouts, while the government insists that federal programs should supplement insurance, not replace it entirely. No one is stepping up to help our communities recover.

This Is Everyone’s Issue

This isn’t simply a problem for “the poor,” so even if you’re comfortably in the middle class, we should all be concerned. After Katrina struck Louisiana, impoverished homeowners were left without support or relief—forcing them to abandon their homes and give up on rebuilding. These abandoned properties bring down the community’s property value in a similar way that a foreclosure does, affecting the families that can afford to rebuild. It hurt everyone—the people who left and the people who stayed.

Abandoned homes also affect public health. Areas with high numbers of abandoned properties were associated with higher rates of chronic illness, mental illness, and homicide. If Houston is going to recover, we have to do it together. All of us are Texans—all of us need to watch out for our neighbors, to make sure we all have what we need. Arnold & Itkin is doing our part by providing supplies for our neighbors and helping them file claims that will help them get back on their feet as quickly as possible.

If you need help filing your Harvey insurance claim or getting what you need from your insurance, Arnold & Itkin can help. We’ve helped our clients recover billions of dollars in verdicts and settlements—call (888) 400-2101.