Also - I went back and read the comments from my post on the call to help sandbag.

http://tpmcafe.talkingpointsmemo.com/talk/2008/06/this-is-it-this-is-why-im-prou.php

Thanks so much for the recommends and to those who made donations to help. I'm very appreciative, but probably not as appreciative as the folks who will benefit from your kindness. THANK YOU.

The reason flood damage isn't covered in standard homeowner insurance policies is because there's a specific exclusion of flooding from the definition of of covered events in the "definitions" section. The specific exclusion makes it impossible to read the policy such that it gets read back into the defintion of covered events, whether as an "act of God" or otherwise.

It's a simple matter of contract interpretation and what people told you before or affect the interpretation. That's because of that clause toward the end of the document, the "integration clause," in legal parlance, that says the written document emobdies the complete agreement of the parties and all prior discussions, writings and oral representations are merged into, made part of and superceded by the written terms of the insurance contract.

FEMA is not an insurance agency. Most of what it does is in the form of disaster relief and low interest loans. There is a federal flood insurance program for people in high hazard areas--but its still insurance. You have to pay for it. In any case, I don't think this lady would have qualified for if she was really in a low hazard area.

The sad part is that if the flood maps really did show she was in a low hazard area, flood coverage should have been dirt cheap.

If she has something in writing saying not to get flood insurance, she might have a tort.

This I know from personal experience: the flood damage itself is, incredibly, only the beginning of the homeowners' nightmare. And it is a third circle of hell nightmare that -- unless there is an enormous hue and cry from the public -- will devastate, and sometimes bankrupt the homeowner, in phases over a period of time that can last for up to three years.
Why? Because far worse than the natural disaster itself, which "merely" trashes a house, is the coldly-calculated, carefully-controlled practice of both wind and flood insurers to delay and, if possible, to deny coverage -- even on policies that were paid-in-full....which trashes innumerable lives, sometimes irreparably. What about FEMA? Forget help from the government -- FEMA will be AWOL for a long time and, when the representatives show up, they will be volunteers, not paid staffers and, in consequence, despite their good hearts they will be disorganized and therefore unhelpful in meaningful terms.
Here is the bottom line, and it is sobering: flood victims who want to deal in reality would be wise to assume that they will not get one penny from their insurers for at least a year. And they will get it then, only if they agree to a payoff that is a fraction of the value of their policy. (They don't tell you to 'save your receipts' for nothing.)
Therefore, flood victims whose houses are lost or uninhabitable should be prepared to pay -- out of pocket, or from savings, or from a high interest loan -- for the following expenses: 1) regular mortgage payments and property taxes (just because the house is gone or you can't live there doesn't mean those costs are not owed); 2) the inflated rent on an alternative house or apartment plus their utilities while you are in transition; 3) cutthroat fees from clean-up crews, engineering firms, surveyors and independent adjusters; 4) replacement costs for necessities from cars to clothing.
And remember this: all these costs are undertaken at your own risk. There is no guarantee that your insurer will pay, ever. Some insurers declare "insolvency" so that their claims may be transferred to a state agency pool that will eventually pay, if you are lucky, twenty cents on the dollar, excluding household possessions, for which they will pay nothing, no matter what the original policy said.)
So, if flood victims do not have an offer of settlement after a year, they must decide whether or not to hire a lawyer or join a class action suit. Individual lawyers must be paid upfront; they will not do contingency fees on flood cases. Class action lawyers will accept contingency fees, but these payouts can take years and the lawyers get up to 33%.
Hyberbolic version? Not at all. It is what is. Really.