Flood Insurance Available To Homeowners
Release Date: June 7, 2000
Release Number: 1328-14
» More Information on Missouri Severe Thunderstorms And Flash Flooding
St. Clair, MO -- In the aftermath of the severe thunderstorms and flash flooding of May 6-7, disaster officials are reminding homeowners throughout Missouri that they may purchase flood insurance coverage through the National Flood Insurance Program (NFIP) administered by the Federal Insurance Administration, a part of the Federal Emergency Management Agency.
"Year in and year out, flooding is the leading cause of property loss from natural disasters in this country," FEMA Federal Coordinating Officer Peter Martinasco said. "But all too often, homeowners learn after the fact that protection against flood loss is not part of their normal insurance protection package."
"There are about 11 million buildings located in designated flood hazard areas in the United States, yet less than 23 percent of them are insured against floods," Martinasco added. "In Missouri, there are 96,000 structures in Special Flood Hazard Areas (SFHAs) of which 16,000 are insured."
Flood insurance is available to residents of communities, which have agreed to adopt and enforce sound floodplain management practices. A total of 586 Missouri communities have done so.
To find out whether your community is participating in the NFIP, homeowners can call their community officials, or George Reidel, state floodplain manager, at 1-573-526-9141, or the NFIP general information toll-free hotline, 1-800-638-6620. (Press "1" then "0" to speak directly with customer service.)
Benefits of NFIP coverage include:
- Eligibility for secured financing to buy, build or improve structures in special flood hazard areas-Lending institutions that are federally regulated or insured must see evidence of NFIP coverage before they grant secured financing.
- Protection against being uninsured in the event of a flood-Standard homeowners insurance policies DO NOT compensate for flood damage.
- Less expensive than federal disaster loans-Average annual premiums for NFIP coverage are significantly less than loan payments, even though those loans are granted under favorable terms. Also, flood damage, from events that are not federally declared disasters, is covered by NFIP policies.
- Reduced risk of flooding-Buildings substantially damaged by flood, when rebuilt to NFIP new construction standards, have less risk of damage from flooding and are eligible for NFIP coverage at a reduced rate.
Homeowners who carry national flood insurance are covered for any flood-related damage to the ground level or upper floor(s) of their homes. Those who have also purchased contents coverage are insured for flood damage to their personal belongings as well. Coverage for flood-caused damage to basements is limited to structural elements and basic items used to service the building such as furnaces, water heaters, utility connections, etc.
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 agent who is in good standing with their state's Department of Insurance.
Martinasco said provisions in the National Flood Insurance Reform Act of 1994 require that homeowners who live in SFHAs and in communities that participate in the NFIP and receive a grant through the Individual and Family Grant (IFG) program for real or personal property following a Presidentially declared disaster must purchase and maintain flood insurance for the life of the property.
The act also requires renters who live in these SFHAs and who receive these grants for personal property must also purchase and maintain flood insurance for as long as they occupy the rental unit. The IFG Program may provide a group flood insurance policy for grant recipients who are required to purchase and maintain flood insurance. This group policy is for up to three years. At that time, the individual is required to purchase and maintain a standard flood insurance policy. If they do not, they will not be eligible for certain types of federal disaster assistance in the future.
If the property is sold, the seller must inform the buyer of the requirement to maintain flood insurance coverage. Under the same circumstances, persons who obtain a U.S. Small Business Administration disaster loan must purchase and maintain flood insurance for the life of the loan.
"The clear message is," Martinasco said, "we want people protected from the devastation of flooding at all times. It isn't fair to leave the impression that disaster aid will always be there as a substitute for flood insurance."
Last Modified: Thursday, 13-Nov-2003 13:36:40