Flood Insurance: Dollars And Sense
Release Date: October 7, 2004
Release Number: 1554-027
» More Information on Georgia Hurricane Ivan
ATLANTA, Ga. -- The figures are remarkable. In the last quarter-century, more than 10,000 Georgians with flood insurance have received more than $123.3 million in loss payments. In the last fiscal year alone, FEMA's National Flood Insurance Program (NFIP) paid out 472 claims to state policyholders to the tune of $3.8 million.
And now, water-logged residents with and without flood insurance are faced with an enormous new set of rebuilding and repairing costs after Hurricanes Frances and Ivan caused millions of dollars in damage statewide.
"The numbers speak for themselves," said Nick Russo of the Federal Emergency Management Agency (FEMA) and federal coordinating officer overseeing Georgia's recovery. "But the most convincing case anyone can make for purchasing flood insurance is the increased peace of mind of knowing that you've protected your most valuable asset or personal property."
Still, almost 42 jurisdictions in Georgia that contain flood-prone areas do not participate in the National Flood Insurance Program (NIFP). Residents living in these parts of the state aren't eligible to purchase flood insurance, and, if they live in a floodplain, they could be denied some types of federal assistance when the next flood disaster strikes.
Flood insurance is available to any property owner or renter in a community participating in the NFIP. Statewide, 445 communities are enrolled in the program. All areas are susceptible to flooding, although to varying degrees. In fact, nationwide 25 to 30 percent of all flood claims occur in the low-to-moderate risk areas, or outside the "one-percent-chance floodplain.";
To get secured financing to buy, build or improve structures in Special Flood Hazard Areas (also known as one-percent-chance floodplains), you may be required to purchase flood insurance. Federally regulated or insured lending institutions must determine if the structure is located in a Special Flood Hazard Area and must provide written notice requiring flood insurance.
"Misinformation and misunderstandings are the main reasons many residents don't buy flood insurance, said Mike Sherberger, State Coordinating Officer and Director of the Georgia Emergency Management Agency (GEMA).
"It fills a huge gap in homeowner coverage at an affordable cost," Sherberger said. "It also can cover a renter's personal possessions as well as some nonresidential buildings such as farm and commercial structures in participating communities."
Russo noted other misunderstandings that often arise:
- Flood damage is not covered by a homeowner's policy. You can protect your home, business and belongings with National Flood Insurance. You can insure your home with flood insurance for up to $250,000 for the building; owners or renters can ensure the contents for up to $100,000. Commercial properties can be insured for up to $500,000 for the building and up to $500,000 for the contents.
- You should consider buying flood insurance no matter what your flood risk. It doesn't matter whether your risk is high, medium or low, you can buy flood insurance from your local agent so long as your community participates in the NFIP. You don't have to live in a mapped flood plain Special Flood Hazard Area in order to purchase flood insurance.
- There is a 30-day waiting period before the coverage goes into effect. Plan ahead so you're not caught without flood insurance when a flood threatens your home or business.
- Federal disaster assistance is only available if the President declares a disaster. Many floods in the United States are not declared as federal disasters. Flood insurance covers the losses even if a disaster is not declared.
Nearly 20,000 communities in the United States and its territories participate in the NFIP by adopting and enforcing floodplain management ordinances to reduce future flood damage.
"The National Flood Insurance Program is a government program that works very well,"; Russo said. ";Taxpayers don't pay a dime for NFIP loss claims. The entire program, including claims and administrative costs are supported by policy premiums collected for flood insurance policies – and the premiums remain the lowest available.";
You can buy NFIP flood insurance through most major private insurance companies and licensed property insurance agents who sell homeowners' or property insurance or call the NFIP's toll-free information line at 1-800-427-4661, (TTY/TD) 800-427-5593.
For a listing of participating or non-participating Georgia communities, visit FEMA's website at: http://www.fema.gov/cis/GA.pdf.
For more information concerning the National Flood Insurance Program, visit www.floodsmart.gov.
Last Modified: Tuesday, 16-May-2006 14:56:01