National Flood Insurance Coverage Available To Homeowners
Release Date: October 12, 2000
Release Number: 1340-13
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Helena, MT -- Although the fires are mostly out, the next disaster could be waiting in the wings. Now is the critical time to prepare for the potential floods that may result from the fires. Restoration efforts are in full force, but rain and snowmelt can wash away soil, sending torrents of water across barren ground and pushing streams over their banks.
But communities-and individuals-can prepare for this threat. A host of mitigation measures can reduce the threat of flooding-but those measures may take time to work. Even then, the threat of flooding remains. It is for this reason that homeowners throughout Montana can purchase flood insurance through the National Flood Insurance Program, a part of the Federal Emergency Management Agency (FEMA).
"As the fall rains come to Montana, the threat of flooding looms large for many whose homes are near fire-ravaged lands," said Jim Greene, state coordinating officer for the disaster recovery efforts currently underway in Montana. "Now is the time to look into buying insurance, not after the worst has happened."
Greene's federal counterpart agrees.
"The federal flood insurance program is one of the best bargains around," said Federal Coordinating Officer Carlos Mitchell. "I urge anyone in Montana who lives in a participating community to take a serious look at purchasing flood insurance now. To find out if you live in a community that participates in the flood insurance program, call your county floodplain manager, Montana Disaster and Emergency Services official, or the National Flood Insurance Program at 1-800-638-6620.
Federal flood insurance can cover a number of expenses. Benefits include:
- Eligibility for secured financing to buy, build or improve structures in special flood hazard area. Lending institutions that are federally regulated
or insured require flood insurance coverage before they grant financing.
- Protection against being uninsured in the event of a flood. Standard homeowners insurance policies do not compensate for flood damage.
- Flood insurance is cost-effective. Premiums for flood insurance are far less than the payments for a disaster loan, so it makes sense to insure
before flooding occurs, not after disaster has struck. The average annual flood insurance policy, as of April 30, 2000, is $353. Depending on
where someone lives and the coverage they choose, flood insurance can cost just a little over $100 a year through the Preferred Risk Policy.
- Broad coverage. Flood insurance covers losses even if the flood is not declared a disaster.
- Reduced risk of flooding. Buildings substantially damaged by flood, rebuilt to NFIP construction standards, have less risk of damage from
future flooding and are eligible for NFIP coverage at a reduced rate.
- People who receive some forms of federal flood disaster assistance are required to purchase flood insurance if they live in a Special Flood Hazard Area. Federal law requires people who receive assistance through SBA disaster loans or individual and family grant programs to purchase and maintain flood insurance as a condition of receiving assistance. If they don't, victims may be ineligible for some assistance programs in the future.
Flood insurance coverage is available for residential and non-residential buildings as well as for contents. Homeowners who carry flood insurance are covered for any flood-related damage to the ground level or upper floors of their homes. Flood damage to personal belongings is covered only if the policyholder purchases contents coverage. Coverage for flood damage to basements is limited to structural elements and basic items used to service the building such as furnaces, water heaters and utility connections.
If you have a home business, a separate NFIP policy is necessary to cover structural or contents damage. Flood insurance is available through any licensed property and casualty insurance agent who is in good standing with Montana's Insurance Division within the State Auditor's Office. There is a 30-day waiting period from the date of application before the policy becomes effective, but a policy can be bought at any time, even during a flood.
"The clear message is that we want people to be protected from the devastation of flooding," said FCO Mitchell. "People need to understand that disaster aid is not a substitute for flood insurance."
Last Modified: Thursday, 13-Nov-2003 10:52:35