Clearing Up Flood Insurance Myths 

Release Date: July 19, 2003
Release Number: 1476-10

» More Information on Indiana Severe Storms, Tornadoes, and Flooding

Kokomo, IN -- In the first few days following a flood disaster, residents may be misled by rumors they hear about flood insurance and what type of disaster assistance is available. When you have suffered a loss, the last thing you need is misinformation.

According to state and federal disaster recovery officials, the best way to avoid that problem is to call and find out for yourself. For rebuilding information if your home was damaged by flooding, call your local building official. To get information on the National Flood Insurance Program, call 1-800-427-4661 (TTY 1-800-427-5593).

To find out about disaster assistance programs, call 1-800-621-FEMA (3362), between 8 a.m. and 6 p.m. daily. The number for those with speech or hearing impairment is 1-800-462-7585. Even if you have insurance, you are encouraged to call the FEMA toll-free number to apply for assistance if you suffered damages or loss in the severe storms and flooding.

As people begin to clean up their homes and think about repairs, disaster recovery officials remind homeowners to check with their local building officials before starting repairs or rebuilding.

Some common misconceptions about flood insurance are:

MYTH: My standard homeowners' insurance will cover me if my house is damaged or destroyed in a flood.
FACT: Homeowners' insurance does not cover flood damage. Federal flood insurance, purchased through your insurance agent or company, is the only guaranteed flood insurance available for your home.

MYTH: Federal disaster aid, available during and after a flood, will reimburse me for losses. Therefore, I don't need to buy flood insurance for my home and belongings.
FACT: Federal Emergency Management Agency (FEMA) disaster aid is only available during presidentially declared disasters. Federal aid is often in the form of a loan from the Small Business Administration (SBA) that you must pay back with interest. Flood insurance policies pay claims whether or not a disaster is declared.

MYTH: I live outside the floodplain, so I don't need to buy flood insurance.
FACT: More than 25 percent of the National Flood Insurance Program (NFIP) claims are for structures outside identified floodplains. Floods can occur anywhere. An area that is near a levee or a dam is at risk of the levee or dam breaking. People who face even moderate flood risks should get insurance, which can be purchased for as little as $85 per year.

MYTH: I can't buy flood insurance because my home has been flooded previously.
FACT: If your community is participating in the NFIP, it doesn't matter that your home has been flooded before. You may still buy flood insurance.

MYTH: If people don't want to purchase flood insurance, it's their own business. It doesn't really affect me.
FACT: When people do not buy flood insurance, you pay more for federal and state disaster relief. Flood insurance is one of the best ways to keep disaster relief costs down for all taxpayers.

MYTH: Flood insurance is available only for home owners.
FACT: Flood insurance is available to protect homes, condominiums and nonresidential buildings, including farm and commercial structures, whether in or out of the floodplain in participating communities. Contents coverage also is available, so renters can receive coverage as well.

MYTH: If a flood is forecast in the near future, it's too late for me to purchase insurance.
FACT: You can purchase flood insurance anytime in a participating community. However, there is a 30-day waiting period after you have applied and paid the premium before the policy is in effect. The policy will not, however, cover a loss in progress.

MYTH: I can only buy federal flood insurance through the federal government.
FACT: You can buy federal flood insurance through most major private insurance companies and property insurance agents.

MYTH: The NFIP does not offer any type of coverage for basements.
FACT: Yes it does. The NFIP defines a basement as any area of a building with a floor that is below ground level on all sides. Basement coverage under an NFIP policy includes clean-up expenses and repair or replacement of items used to service homes and buildings. These can include elevators, furnaces, water heaters, air conditioners, utility connections, circuit breaker boxes, pumps and tanks used in solar energy systems. Flood insurance will not cover the contents of a finished basement and basement improvements such as finished walls, floors and ceilings.

Last Modified: Monday, 21-Jul-2003 08:08:24