Consider Flood Insurance Before It Is Too Late
Release Date: October 10, 2003
Release Number: 1490-47
» More Information on North Carolina Hurricane Isabel
Raleigh, NC -- Every year, more homes in the U.S. are damaged by floods than any other natural disaster. Having a flood insurance policy is the surest way to deal with flood damage and loss, according to Gracia Szczech, the federal coordinating officer leading the Federal Emergency Management Agency's (FEMA's) efforts to assist North Carolina's recovery from Hurricane Isabel.
"Securing flood insurance is one of the best precautions one can take," according to Szczech. "No matter where you live, flood insurance is a good way to protect your property investment."
When Hurricane Isabel struck North Carolina last month, 101,548 households and businesses in the state had flood insurance policies. As of the close of business on Monday, 5,532 policyholders had filed claims. By comparison, during Hurricane Floyd in September 1999, 18,555 claims were paid, totaling $436.9 million. An average of $23,544 was paid per claim.
Flood insurance policies are available to anyone who lives in an area that participates in the National Flood Insurance Program (NFIP.) In exchange for their local government's careful management of flood-prone areas, residents of communities that participate have the option of buying flood insurance. In North Carolina, 464 eligible communities participate in the NFIP. (Local housing and building departments can advise property owners whether their community participates.)
Premiums are reasonable-averaging $432 per year for coverage. They can now be paid by VISA or MasterCard, as well as by cash, check and money order or through an escrow account established by your mortgage lender. If you live in a low-to-moderate risk area, a preferred-risk policy will cost $232 per year for $100,000 structure and $25,000 contents coverage.
Important facts to know about flooding and the National Flood Insurance Program are:
- Homeowners' insurance policies do not cover flood damage; however your home, business and belongings can be protected with flood insurance. Ask your local insurance agent about an NFIP policy.
- You can purchase flood coverage at any time. There is a 30-day waiting period after you have applied and paid the premium before the policy becomes effective. However, if you've just purchased a new home and are taking out a mortgage or are refinancing your current residence, there is no waiting period.
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You can insure your home for up to $250,000 for the building and up to $100,000 for the contents. If you are a business owner, the maximum is $500,000 on the building and another $500,000 on contents.
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Both structure and contents can be insured with a single flood insurance policy. However, you must specifically ask for coverage of your personal property when buying that policy. Contents coverage is not included unless you request it. Ask your agent. Renters also can insure their personal property.
- Flood insurance provides financial protection whenever covered properties are damaged due to flooding, if a disaster is federally declared or not.
By law, once a person receives federal disaster assistance (such as a housing grant or a federal disaster loan from the U. S. Small Business Administration or the U. S. Department of Agriculture) due to a federally declared flooding disaster, they must buy and maintain a flood insurance policy as long as they own or live in the building that was flooded and is located in a Special Flood Hazard Area. If these individuals do not maintain flood insurance, they are not eligible for federal grants or loans in future floods.
Flood insurance is required for structures in high-risk flood areas with mortgages from federally regulated lenders. It is sold and serviced by about 90 private insurance companies and through more than 60,000 insurance agents.
There are some areas where flood insurance is not available, such as non-participating communities, Coastal Barrier Areas or Otherwise Protected Areas where building and development is discouraged.
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 Citizen Corps, the National Flood Insurance Program and the U.S. Fire Administration.
For more information about hurricane preparedness and recovery and specific information about Isabel, visit the FEMA website at www.fema.gov.
Last Modified: Friday, 10-Oct-2003 13:56:33