FEMA/SEMA After The Flood Home Maintenance Series (5) Buying Flood Insurance Now Will Save Dollars, Heartache Later
Release Date: July 29, 2003
Release Number: 1476-23
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Kokomo, IN -- One of the ways to protect your home in future floods is to purchase flood insurance. This is the best means of recovery from flood damages.
Flood insurance is available to any property owner located in a community participating in the National Flood Insurance Program (NFIP). In 1968, Congress created the NFIP to provide flood insurance at a reasonable cost in exchange for careful management by local communities of flood-prone areas. The Mitigation Division of the Federal Emergency Management Agency (FEMA) manages the NFIP and oversees the floodplain management and mapping components of the Program.
Flood insurance provides coverage that your homeowners or renters insurance doesn't - coverage for damages caused by floods. You do not have to live in a floodplain to buy flood insurance. In fact, more than 25 percent of flood insurance claims come from medium- or low-risk flood areas. Homeowners, business owners and renters all can purchase flood insurance as long as their community participates in the NFIP.
You can buy flood insurance from any licensed insurance agent, or through NFIP by calling 1-800-427-4661.
Points to Remember
- Compared to a fire, people in floodplains are four times more likely to have a flood during their 30-year mortgage.
- There is a 30-day waiting period from the time the premium is paid until the time the policy becomes effective.
- Flood insurance coverage is available for residential and business structures and contents. A single-family home can be insured for up to $250,000. An additional $100,000 can be purchased for contents. Commercial buildings can be insured for up to $500,000. Business contents can be covered for up to $500,000.
- Renters can purchase contents coverage for up to $100,000 to cover personal belongings.
- A flood insurance policy reimburses you to certain limits for actions taken to prevent flood damages. These actions can include moving the insured contents to a safe place and/or the cost of purchasing sandbags, plastic sheeting, lumber, pumps, etc.
- Flood insurance claims are paid even if a federal disaster is not declared by the President.
- A flood insurance claim will reimburse you for your covered losses and never has to be repaid, unlike a disaster assistance loan.
- Flood insurance claims are handled quickly so that flood victims can recover quickly.
- Flood insurance claims are paid by policyholder premiums, not tax dollars.
How to Purchase a Flood Insurance Policy
- First, contact your local government officials to determine whether your community participates in the National Flood Insurance Program. If it does, you can buy flood insurance coverage. If it does not, you cannot buy coverage.
- Next, contact your insurance agent or the NFIP and tell them you would like more information about flood insurance. They should be able to tell you what is covered and how much your policy will cost.
- The cost will be determined in part by whether you live in a floodplain, also known as Special Flood Hazard Area (SFHA). Your local building official(s) should have maps showing if there are Special Flood Hazard Areas and where they are. You can determine whether you are in a low, medium or high-risk area by checking these maps.
- Those who are located outside the floodplain may be able to get a Preferred Risk Policy. These policies offer fixed combinations of building and contents coverage at set prices
- Another way to reduce your premium is through an elevation rating. If the lowest floor of your house is above the base flood elevation (predicted flood depth in your area), you can qualify for lower rates. Local officials can help you determine the base flood elevation for you home.
- On the other hand, if you live within a floodplain, your chances on getting flooded are higher - therefore the premium is higher. Even so, the cost of flood insurance is far cheaper than having to pay thousands of dollars to repair your home or replace contents because a flood caught you off guard.
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.
Last Modified: Tuesday, 29-Jul-2003 15:55:24