National Flood Insurance Program

Many residents remain without flood insurance because their home or business has never been flooded. However, for those who live in a low- to moderate-risk area, signing up for an inexpensive Preferred Risk Policy under the National Flood Insurance Program ( NFIP ) makes sense. Flood damage is not covered under homeowner insurance policies, and there is no guarantee that federal assistance will be available when a flood occurs.

NFIP’s Preferred Risk rates are quite a bargain for residents. Premiums start at $119 for building and contents coverage. A home can be covered up to $250,000 for the dwelling and $100,000 for contents. Replacement cost coverage is available for single-family, primary residences. Renters can purchase insurance for contents only.

Business owners are also eligible for Preferred Risk Flood Insurance. Commercial premiums start at $550 per year for the building or $145 per year for contents only. Non-residential coverage can be purchased for up to $500,000 for the dwelling and $500,000 for the contents.

The Federal Emergency Management Agency ( FEMA ), which administers the Preferred Risk Policy under NFIP, reminds residents that flood insurance is important because floods can occur where they are least expected. Approximately 25 percent of all claims paid by the NFIP are for policies in low- or moderate-risk communities.

“Every year, flooding causes billions of dollars in property damage in the United States,” said NFIP Floodplain Management Specialist Margaret Salfrank. “Yet thousands who experienced flooding had no flood insurance because they thought they would never need it.”

The special Preferred Risk Policy is available for buildings that house one to four families, and non-residential properties. Other insurance is offered at regular rates for buildings in higher risk areas and other types of properties. The Preferred Risk Policy will not be issued if a property owner has received:

• Two flood loss payments of more than $1,000 each;
• Three or more loss payments of any amount;
• Two federal disaster relief payments of more than $1,000 each;
• Three federal disaster relief payments of any amount; or
• One flood insurance claim payment and one disaster relief payment of more than $1,000 each including loans and grants.

Considering the substantial costs involved in repairing a flood-damaged home and replacing valuable contents, the Preferred Risk Policy can be a wise purchase for property owners. For more information, call the National Flood Insurance Program at 1-800-427-4661 or visit the NFIP Internet site at www.floodsmart.gov. At the Web site you can enter your home or business address to view your flood-risk level and find an insurance agent near you who sells NFIP policies.

FEMA coordinates the federal government’s role in preparing for, preventing, mitigating the effects of, responding to, and recovering from all domestic disasters, whether natural or man-made, including acts of terror.

After the Flood - Tips for Homeowners

Tips to get you back home, safe and sound
Whether you face a mud-coated lawn or waterlogged house, returning to a flood damaged property is traumatic, and can be dangerous as well.  Just because the waters have subsided you’re not necessarily on safe ground. After you’re certain your neighborhood and home are free of major hazards, follow these guidelines to start over and take care.
Going in
Even after local law enforcement and utility companies have declared an area ready for homeowners to return, you’ll need to approach your property with caution. Check all of the items on this list to ensure you go home unharmed. While you’re at it, take along a notebook or camera to document any damage for insurance claims and tax forms.

• Even if electricity is turned off in the area, be sure it is disconnected at the house.
• Assume all wires (cable and electricity) on the ground are live and report them to the power company.
• Make sure the house is completely dry before turning power back on. All wet furnishings and carpets must be removed.
• Have the wiring and all appliances checked by a licensed electrician.
• Look for exterior structural damage on the house including cracked foundations, sagging roofs, broken columns or piers and unsupported porch roofs. If the structure is severely damaged, do not enter the house.   Call an inspector or contractor instead.

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• Watch for sagging ceilings. Damaged plaster or wallboard can collapse and cause injury. Carefully open doors and wait to see if debris falls before entering.
• Look for broken gas lines and listen for gas leaks. If you smell gas, do not enter the property. Immediately report the suspected leak to the gas company.
• Have a licensed plumber or the utility company check the gas lines before restoring service.

Other precautions

• Never approach a flood-damaged property after dark. Wait for daylight when you can see all potential dangers. Use a flashlight only to further illuminate dark interiors or corners. Candles, lighters and other open flames can ignite gas leaks or spilled combustibles.
• Remember that mud deposited by floodwaters may be contaminated with sewage and other harmful bacteria. Wear boots and gloves and be sure to wash with a disinfectant soap after contact with mud.
• Never drink the local water without boiling. Water supply lines and wells will need to be flushed and tested before it is safe to drink tap water.
• Dispose of all foods (even canned goods) that may have been in contact with floodwaters.

Source: U.S. Federal Emergency Management Agency

Flood Insurance

Flood insurance protects you from the financial devastation caused by floods. Even a few inches of water can bring thousands of dollars in repair and restoration costs. Most homeowners insurance does not cover floods. You need flood insurance.

Flood insurance, like earthquake insurance, is “single peril” insurance, sold separately from homeowners insurance. Flood insurance protects against losses to buildings and their contents, not the land surrounding them. The coverage applies whether the flooding results from heavy or prolonged rains, coastal storm surge, snow melt, blocked storm drainage systems, levee dam failure, or other causes. To be considered a flood, the waters must cover at least two acres or affect at least two properties.

Flood insurance is available both within and outside of floodplains. Your property’s flood risk is shown on flood hazard maps. Different types of policies are available depending on your flood risk.

If you live in a high-risk area, you will need a Standard Policy. Most mortgage lenders will require that you have such a policy before they will approve your loan.

Outside of high-risk areas, flood insurance is also available, usually at lower cost. A Preferred Risk Policy covers both a home and its contents, with premiums as low as $119 per year. While you aren’t federally required to have flood insurance in a low-to-moderate risk area, that does not mean you won’t ever need it. Large floods often extend beyond the boundaries of high-risk areas and smaller floods occur outside high-risk areas as well. In fact, a quarter of all flood insurance claims come from low-to-moderate risk areas.

Flood insurance is sold and serviced by private insurers, and backed by the federal government. More than 85 companies sell flood insurance. Often the same insurance agent who wrote your homeowners insurance policy can help you obtain flood insurance. Or you can find an agent near you by clicking on Agent Locator to the left and entering your zip code. Flood insurance costs the same wherever you purchase it, because the rates are set by the National Flood Insurance Program.

Flood insurance covers both homes and businesses. With residential coverage you can get up to $250,000 of insurance to protect your home and up to $100,000 to protect its contents. If you are located in (or moving into) a high-risk area, federally regulated or insured lenders will require you to have flood insurance for the amount remaining on your mortgage, or $250,000, whichever is lower. With commercial coverage, you can get up to $500,000 of insurance to protect your building and up to $500,000 to protect its contents.

Different types of policies are available based on your property’s location and flood history.

Standard Flood Insurance Policies - If you live in a community that participates in the NFIP, your building and its contents can be covered. You must apply for building coverage and contents coverage separately.

Preferred Risk Policies - If your home or business is in a low or moderate risk zone, your building may qualify for a low-cost Preferred Risk Policy. Premiums for both building and contents start at just under $119.

Don’t Wait Until It’s Too Late
Regardless of the type of policy you choose, there is a standard 30-day waiting period, from date of purchase, before a new flood policy goes into effect. The 30-day waiting period does not apply if:

• The initial purchase of flood insurance occurs in connection with the making, increasing, extension, or renewal of a loan in a high-risk zone by a regulated lender; or
• The initial purchase of flood insurance occurs within one year of a map change.