Flood Insurance: Preparing For The Next Disaster
Release Date: October 25, 2004
Release Number: 1569-012
» More Information on Minnesota Severe Storms and Flooding
OWATONNA, Minn. -- As the mid-September deluge of rain in southeastern Minnesota proved, homes can get flooded in areas that have never been flooded before. Floods can happen anywhere. Buying flood insurance is the best thing you can do to protect your home, business, family and financial security.
The Federal Emergency Management Agency (FEMA) offers this important insurance coverage through the National Flood Insurance Program (NFIP). The NFIP was created by Congress in 1968 to provide flood insurance at a reasonable cost in exchange for careful management by local communities of flood-prone areas.
Who needs flood insurance? Everyone. And everyone in a participating community of the National Flood Insurance Program (NFIP) can buy flood insurance. Nationwide, more than 19,000 communities have joined the program. In some instances, people have been told that they cannot buy flood insurance because of where they live. To clear up this and other misconceptions about Federal flood insurance, the NFIP has compiled the following list of common myths about the program, and the real facts behind them, to give you the full story about this valuable protection.
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 in the case of a presidential disaster declaration. Federal aid often comes in the form of a loan, repayable with interest, from the Small Business Administration (SBA). 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 may be at risk of the levee or dam breaking. People who face even moderate flood risk 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 can 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 homeowners.
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, and the policy will not cover a loss in progress.
MYTH: Federal flood insurance can only be purchased through the NFIP directly.
FACT: You can buy federal flood insurance through most major private insurance companies and property insurance agents. If you cannot find an agent in your area, call NFIP Customer Service at 1-888-379-9531 or TTY 1-800-427-5593 for those with speech or hearing impairment. If you have access to the Internet, you can log on to www.floodsmart.gov and type in your location; the web site will furnish you with a list of agents in your area.
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 that are structural elements and essential equipment. These can include 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.
FEMA has launched “Floodsmart,” a national flood insurance awareness campaign aimed at helping consumers understand flood insurance and how to prevent future flood losses. You can find out more by calling 1-800-427-4661 or find them on the web at floodsmart.gov.
On March 1, 2003, FEMA became part of the U.S. Department of Homeland Security. FEMA’s continuing mission within the new department is to lead the effort to prepare the nation for all hazards and effectively manage federal response and recovery efforts following any national incident. FEMA also initiates proactive mitigation activities, trains first responders, and manages the National Flood Insurance Program and the U.S. Fire Administration.
Last Modified: Monday, 25-Oct-2004 13:26:04