FEMA Reminds Residents of Flood Insurance Needs

Many residents across the country have recently experienced devastating losses caused by flooding. Some suffered the total loss of their homes to floodwaters. Others are trying to make their homes livable again.

According to FEMA, time and time again, far too many individuals shoulder these burdens without the financial cushion of flood insurance. In some instances, people have been told they cannot buy flood insurance because of where they live, or because they’ve flooded before.

To address these and other misconceptions about the National Flood Insurance Program (NFIP), FEMA has compiled the following key facts that everyone should know about flood insurance:

1. Flood insurance is available. You can – and should – buy flood insurance. As long as you live in a participating NFIP community, and there are more than 20,500 nationwide, you can purchase flood insurance from your insurance agent. And you can purchase a policy if you have, or have not, flooded before. Renters, condominium owners, homeowners and business owners are all eligible to purchase a policy.
2. Flood insurance is sometimes required – but should always be considered. Flooding can happen anywhere, anytime, due to factors such as heavy rains, melting snow, failed protective devices such as levees and dams, as well as tropical storms and hurricanes. Most individuals that have a home in a high-risk area are required by law to carry flood insurance. But, just because flood insurance is not required does not mean it is not needed. Even if your lender doesn’t require you to carry it, you should ask your agent about flood insurance options to better protect your biggest investment. Without a flood insurance policy, your financial security is at risk.
3. Flood insurance is the most dependable resource for a speedy recovery. Most homeowners insurance does not cover losses due to flooding. Only flood insurance covers damage from rising waters. Remember that all floods are not major floods and, despite what many might think, Federal disaster assistance is not always available after a flood. When such assistance is available, it usually comes in the form of a low-interest loan, which must be paid back with interest.
4. Flood insurance is affordable. Rates are based on a variety of factors such as flood zone, date of construction, history of flood claims, elevation of the lowest floor of the building, etc. The average flood insurance premium is around $500 per year. If you live in a low-to-moderate risk area, lower-cost Preferred Risk Policies start as low as $119 a year. Flood insurance rates are federally set and will not differ from one insurance company to another.
5. Flood insurance is available for your building and its contents. Standard flood insurance policies require that you purchase additional coverage for your contents. However, if you live in a lower-risk area, you may be eligible for a Preferred Risk Policy that covers both your structure and personal items for a lower cost than a standard flood policy. For a complete summary of building and contents items covered by flood insurance, visit http://www.fema.gov/pdf/nfip/summary_cov.pdf.
6. Know your coverage limits – and be fully insured. A maximum of $250,000 of building coverage is available for single-family residential buildings; $250,000 per unit is also available for residential condominiums. The limit for contents coverage on all residential buildings is $100,000, which is also available to renters. Commercial structures can be insured to a limit of $500,000 for the building and $500,000 for the contents. Review your coverage limits to make sure you are adequately insured for your building, its contents and any improvements made to your home.
7. The 100-year flood standard – what it really means. The government’s definition of a floodplain, or high flood risk zone, is an area which has at least a one-in-100 or one percent chance of flooding in any given year. These one percent chance flood events are often called “100 year floods”, but that term can be misleading. The 100-year flood benchmark is a minimum standard used for insurance purposes. While major flood events are not common, they happen, have happened recently and will happen again.
8. Levee protection comes with risks. Levees, dams and other flood control structures are designed to protect against a certain level of flooding. In more serious flood events, levees can fail or overtop. And, as levees age, their level of protection can change. When levees overtop or fail, the flooding that follows can be catastrophic. Because of these unique risks, if you live near a levee, dam, or in areas reliant on other flood control structures, purchasing flood insurance is highly recommended.
9. Filing your claim – what to expect. After a flood event, call your agent or insurance company and ask when to expect an adjuster at your home. Be sure to call your insurance company back if you haven’t been assigned an adjuster within several days of flooding. Before the adjuster arrives, separate damaged and undamaged items, take photos, make a list of damaged or lost items and make a copy of the damage estimates prepared by a contractor to give to the adjuster. Once a detailed proof of loss statement has been prepared and agreed upon, your claim can be submitted.
10. Stay insured. You can purchase flood insurance at any time. However, there is usually a 30-day waiting period before the policy becomes effective. If you already have a flood policy, remember: your policy needs to be renewed each year.