Buying Flood Insurance Now Can Save Dollars, Heartache Later
Release Date: July 13, 2004
Release Number: 1526-028
» More Information on Wisconsin Severe Storms and Flooding
MADISON, Wis. -- As people are repairing and rebuilding their homes and businesses after the recent flooding, many are wanting to take steps to reduce the cost of flood damage in the future. One of the ways to protect your home is to purchase flood insurance. This is the best means of recovery from flood damages.
Because many floods are too small or too local to be declared a Federal disaster, assistance is not always available. But if you have flood insurance, you can depend on being reimbursed for flood damages even if the President does not declare the incident a Federal disaster. The likelihood of people living in a floodplain to experience a flood during their 30-year-mortgage is more than four times that of having a fire damage their home.
People who live near water are not the only ones who experience flooding. Floods can move and spread for miles. Flash floods can begin and end within just hours, cutting a path of major destruction. More than 25 percent of flood insurance claims come from medium- or low-risk flood areas, so even if your home is not located in the floodplain, you should consider buying flood insurance.
Flood insurance provides coverage that your homeowners or renters insurance doesn’t – coverage for damages caused by floods. Homeowners, business owners and renters all can purchase flood insurance as long as their community participates in the National Flood Insurance Program (NFIP).
You can buy flood insurance from any licensed insurance agent, or through NFIP by calling 1-800-427-4661.
Flood Insurance Facts
- 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 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.
- There is a 30-day waiting period from the time the premium is paid until the time the policy becomes effective.
- Flood insurance claims are handled quickly so that flood victims can recover quickly.
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.
- 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 SFHAs 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 lower 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 of 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.
- For more information on NFIP, visit the FloodSmart web site at: www.floodsmart.gov.
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 ini
Last Modified: Tuesday, 13-Jul-2004 09:50:06