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Sanford — The night of the flood, the water in the man-made reservoir behind Nancy Gorton's dream retirement home began swirling like a draining bathtub.

"We knew at this point Sanford Dam had let go," says Gorton, sitting in her gutted garage and playing a May 19 video of the shifting, circling dark waters on her phone. "This would be like pulling the plug. The water became just raging."

The water raged into Gorton's home with enough force to shift heavy furniture, caking three inches of mud on the back deck and carrying a set of wooden steps that her husband made down the street a quarter mile. Now, the home's electrical system needs to be replaced. The house needs to be dried out, power washed and sprayed with a cleaning agent. 

Almost two weeks ago, amid heavy rainfall and two dam failures that forced thousands of people in Midland County to evacuate, billions of gallons of water poured into homes along Sanford Lake after the upstream Edenville Dam failed and caused the breach of the Sanford Dam. The water wrecked interiors, knocked over granite countertops and left inches of mud in its wake.

Fifteen minutes away from the lake in Midland, the water often didn't come through windows or doors but up through basement drains, destroying furnaces and water heaters and wrecking family heirlooms.

Now, property owners in the Midland area say they're facing vast repair costs without insurance money to get by. Gorton and others along Sanford Lake, where dam failures turned the emptied lake to a field of mud, said their homes weren't located in flood zones that would have required flood insurance as part of a mortgage.

Insurance industry representatives said the situation in Midland is a tragic but cautionary tale of how people often believe disasters won't strike in their backyards.

Mark Brown, an electrician with two homes along Sanford Lake, said his insurance company wouldn't give his family a penny after the floodwaters hit on May 19. Gorton said her insurance company offered $2,500 — a minuscule fraction of the money needed to repair a home that she and her husband spent nights and weekends building. The property overlooked Sanford Lake with a large back porch and windows.

The windows provided a view of a lake on which jet skis and boats floated with a park nearby. On Wednesday — eight days after the flood — brown mud dominated the scene outside the windows. The water was gone. But the words "Lake View" still stood as decoration on one of home's walls.

"He said, 'We don’t cover natural disasters. This was a natural disaster. And you only get $2,500,'" Gorton said about her insurance company agent. "I am not going to buy insurance after this. What’s the point? What is $2,500 going to do in a scenario like this?”

That scenario is playing out repeatedly in Midland County. The remediation process needs to start immediately in many flooded homes, but some property owners don't know how they'll afford to do the clean-up, repairs and, in many cases, complete rebuilds. 

“You can’t mourn your loss because you have to keep moving," Gorton said. "Because mold is setting in. Mold is your enemy.”

Ieuter Insurance Group serves a third of Midland residents, according to Kurt Ieuter, who owns the business with his brother. The company has filed almost 700 claims, including for boats, from the flood.

“The biggest problem and most heartbreaking thing is most people do not have flood insurance,” Ieuter said. “I never would have bought flood insurance, and I am an insurance agent.”

Flood insurance can be expensive, and people often get the least costly policy necessary when required as part of a mortgage, said David Walker, president of the Hartland Insurance Agency in Hartland Township.

Attorney urges compensation fund

While crews were working on Gorton's home last week, across the street, Mark Brown was still unsure what would happen with the homes his family owns near Sanford Lake.

Brown's insurance company isn't going to provide any support, he said. And he questioned whether it would make sense to invest to rehabilitate homes along a lake that no longer exists.

"The insurance companies are calling it a flood and not a man-made disaster," said Brown, who is now considering declaring bankruptcy.

He has owned one of the homes near the lake since 1996. Before the flood, it had never had water in its crawl space, he said. After the flood, the estimated cost just to dry out one of the homes was $10,000, he said. For the other, it was $30,000, he said. It would be just the first step in repairing the properties.

Brown said he once had flood insurance when the property was considered to be in a flood zone. But the status changed years ago, and his family hadn't been able to buy flood insurance when they tried in recent years, he said.

Brown's daughter and her family lived in one of the homes. He and his wife lived in the other.

"If we don’t do something in the next week or two, it doesn’t matter anyway, because the mold is going to start growing,” he said.

And the restoration companies want half of the money in cash upfront because they know insurance companies aren't paying, he said.

Homeowners mostly aren't getting any insurance money, said Michael Pitt, an attorney who's working on a lawsuit seeking class-action status against the state for its handling of the failed Sanford and Edenville dams. His law firm is talking to insurance experts about the situation, he said.

"The reports that we’re getting is that most of the people have been told by their insurance companies: No coverage," Pitt said.

Lawsuits against the state or private dam owner Boyce Hydro could take years to play out. Meanwhile, Pitt said the state should set up a compensation fund to begin helping flood victims immediately.

Gov. Gretchen Whitmer visited Sanford last week and announced the Department of Environment, Great Lakes and Energy would investigate the dam failures. She also said she's working with state and federal partners to help those affected "get back on their feet."

"While the need is immediate, sometimes the relief takes a little bit longer," Whitmer said. "We're working incredibly hard to try to expedite that."

'We're going to get through this'

The Michigan Department of Insurance and Financial Services on Thursday sent out tips for those making insurance claims because of the flood. DIFS Director Anita Fox acknowledged "most homeowners and renters insurance policies do not cover flood damage."

For people with private or federal flood insurance, the policies would likely cover damage caused by dam failures with limitations on coverage, according to the state department. For example, so-called contents coverage would not cover belongings in the basement or other areas below the lowest elevated floor.

In the city of Midland, many property owners are dealing with drain water damage. In multiple neighborhoods, piles of debris still sat along curbs more than a week after the flooding hit.

Four feet of water accumulated at the bottom level of Karen Kilbourn’s tri-level Midland home. She and her husband got pumps to remove 175,000 gallons over 30 hours.

They had to take a couple walls down and are buying a new water heater and furnace. Kilbourn said she expects costs to amount to around $12,000 — and so far hasn’t received insurance support.

“I reached out to my local representative” with Farmers Insurance Group, the small business owner said. “And he pretty much told me, ‘You’re not going to get anything.’ So I called corporate, and they started a claim for me. They didn’t know what was going on here. Maybe three hours after, it was denied. It didn’t matter it was a back-flow issue. It didn’t matter it was an act of God. It didn’t matter that two dams broke.

“When something like this happens, there’s no sympathy. They didn’t even send an adjuster. They didn’t even look.”

In a statement, Farmers urged homeowners to regularly review their coverage options with their agents and consider available options and add-on endorsements.

"Our customer’s policy, like other standard homeowners policies, provides coverage for certain types of water damage resulting from direct, sudden and accidental release of water originating from the insured’s property," the company said in a statement. "After reviewing the facts of this loss, we have determined the damage resulted from the reverse flow of water from outside of the home, for which coverage is not typically available."

Ieuter of the Ieuter Insurance Group expects some insurance companies are seeing the photos coming from Midland and calling it a blanket-statement flood. But he encouraged homeowners to look at their policies for coverage concerning water coming up through the drains or from sump pump failure. That is how Ieuter has been able to help most homeowners, he said. Those checks range between $5,000 and $50,000, but in most cases, they're not enough.

“We hope FEMA (Federal Emergency Management Agency) will come to help,” Ieuter said.

The state is working with county and local governments to have residents submit details and photos of the damage to their homes and businesses. State officials then will decide whether to request the president make a major disaster declaration for individual and public infrastructure assistance.

President Donald Trump already has approved a federal emergency, but a disaster declaration would allow FEMA to provide additional support to residents, including potentially in the form of low-interest loans and grants.

Richard Rasmussen of Midland said a third of his home was outside on the curb after six feet of water entered it the week earlier. His furnace, refrigerator and a piano his son, Sean, would play when he returned home for Christmas were destroyed.

While Rasmussen's insurance policy would cover some of the damage, the money wouldn't begin to rebuild his basement, he said.

On Thursday, he was disinfecting decades-old black-and-white family photos. One image dated back to 1934.

"It's devastating," Rasmussen said of the debris lining Partridge Lane in Midland. "This is your life you know."

Sitting in a folding chair in the driveway, he added, "we're going to get through this."

cmauger@detroitnews.com

bnoble@detroitnews.com

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