Flood Insurance Policyholders A Step Ahead In Recovery Process
Release Date: January 6, 2005
Release Number: 1539-334
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Before flooding touches them, many people are not aware that a regular homeowner’s insurance policy does not cover flood damage or loss. To meet this need, NFIP insurance is available to those in participating communities. These communities agree to adopt and enforce sound floodplain management practices to reduce future flood damage.
“The NFIP is intended to make affordable flood insurance available on a nationwide basis,” said Bill Carwile, federal coordinating officer for the Department of Homeland Security’s Federal Emergency Management Agency (FEMA). “The NFIP speeds up recovery from floods, lessens losses from future floods, saves lives and reduces the personal and national costs of flood disasters.”
Homeowner insurance companies can sell flood insurance policies, through local insurance agents, and handle claims for the NFIP, which is underwritten by FEMA. The average NFIP premium is approximately $400 per year depending on where you live and the coverage you choose. In low-to-moderate risk areas, the cost of coverage can be as low as $112 a year. For more than 35 years, FEMA and its partners in the insurance industry have provided much-needed, affordable insurance against flood losses.
Currently the NFIP insures more than 1.8 million Florida policyholders, who make up more than 40% of the 4.5 million NFIP policyholders nationwide. But considering that in a high risk area, your home has a 26% chance of being damaged by a flood during the course of a 30-year mortgage, compared to a 4% chance of fire, many more people could benefit from taking the precautionary measure of purchasing flood insurance.
How to Purchase a Flood Insurance Policy
- First, contact your community emergency management agency or building department to determine whether your community participates in the NFIP. If it does, you can buy flood insurance coverage.
- Next, contact your insurance agent or the NFIP direct by calling 1-888-379-9531 (TTY 1-800-427-5593) 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 community emergency management agency or building department should have maps showing if there are SFHAs and where they are. They can also 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 lower set prices.
- On the other hand, if you live within a floodplain, your chances of getting flooded are higher – therefore the premium is higher. Even so, the cost of flood insurance is far less expensive than having to pay thousands of dollars to repair your home or replace contents because a flood caught you off guard.
For more information on NFIP, visit the FloodSmart web site at: www.floodsmart.gov.
FEMA prepares the nation for all hazards and manages federal response and recovery efforts following any national incident. FEMA also initiates mitigation activities, trains first responders, works with state and local emergency managers, and manages the National Flood Insurance Program and the U.S. Fire Administration. FEMA became part of the U.S. Department of Homeland Security on March 1, 2003.
Last Modified: Wednesday, 12-Jan-2005 11:05:20