Colorado Residents Urged To Buy Flood Insurance
Release Date: July 2, 2002
Release Number: 1421-12
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Denver, CO -- One of the most important things Colorado residents can do to protect their homes, businesses and personal property is buy flood insurance. Colorado wildfires have destroyed or damaged more than 344,361 acres of land since the recent fires began. This altering of the landscape may increase the probability of flooding.
Bare earth is exposed to the damaging effects of rain, snow, wind and other elements. This loss of natural forest barriers may result in devastating damages from flash floods, mud flows and debris flows, even in the event of a very small amount of rain.
"While the fires in Colorado could not be predicted the flooding danger posed by erosion following the fires is evident. Residents should take this opportunity to protect themselves against another potential disaster by purchasing flood insurance," said Steve Emory, federal coordinating officer from the Federal Emergency Management Agency (FEMA).
Standard homeowners insurance policies do not protect against flood-related losses. Only flood insurance does. Flood insurance will pay even if there is no federal disaster declaration.
"Year after year, flooding is the leading cause of property loss from natural disasters in this country," Emory said. "But all too often, people learn after the fact that protection against flood loss is not part of their normal homeowners insurance policy."
Buying a national flood insurance policy is the first line of defense against economic losses caused by flooding. Homeowners should consider buying flood insurance even if they do not live in a mapped flood plain. In fact, 25 percent of damages occur outside of high-risk areas and 30 percent of claims paid are not in a flood plain.
Homeowners, business owners and renters can buy federally-backed flood insurance. For a single-family home, you may purchase flood insurance coverage up to $250,000 on a structure and up to $100,000 on the contents. "In most cases, you can insure your home and all its contents against flooding for less than it costs to insure your car," said Emory.
If you are a business owner, the maximum is $500,000 on the building and another $500,000 on contents. Renters may purchase up to $100,000 worth of coverage for personal belongings.
Even in a declared disaster, a low-interest loan from the U.S. Small Business Administration (SBA) is the primary form of recovery assistance for homeowners, renters and businesses. The yearly premium for a flood insurance policy is usually cheaper than the monthly payment for a loan.
Important features of the National Flood Insurance Program are:
- Most everyone can and should buy flood insurance.
Even if you don't live in a high-risk flood zone, you can purchase flood
insurance if your community participates in the NFIP. Anyone can be
flooded. More than 90 percent of all presidentially-declared disasters
include flooding."
- Flood damage is not covered by homeowners insurance
policies. You can protect your home, business, and belongings with flood
insurance. Flood insurance can be purchased through your local insurance
agent. The NFIP is sold through private insurance companies and is backed
by the federal government.
- You can insure your home for up to $250,000 for the
building and up to $100,000 for the contents.
- Contents coverage is separate. It is not automatically
included with building coverage. Ask your agent. Renters can insure
their belongings, too.
- Flood insurance pays even when no disaster is declared.
An NFIP policy will pay for flood damage whether or not there is a federal
disaster.
- Flood insurance is affordable. The average flood
insurance policy costs a little more than $300 a year for about $100,000
of coverage.
- Flood insurance can be purchased any time, but there
is a 30-day waiting period after application and payment before the
policy becomes effective. The 30-day period does not apply when: a new
loan is obtained or an existing loan is, increased, extended or renewed
and secured by the property for which the loan was made.
- For information call the National Flood Insurance Program, toll-free at 1-800-427-4661. Homeowners, renters and business owners can call for the names of local agents who handle flood insurance.
Last Modified: Friday, 15-Aug-2003 10:39:54