Flood Insurance Facts for Homeowners

Flood Insurance Facts for Homeowners

Why buy flood insurance?

  • Federal disaster assistance is usually a loan that must be paid back with interest. For a $50,000 loan at 4% interest, your monthly payment would be around $240 a month ($2,880 a year) for 30 years. Compare that to the average flood insurance policy, which is about $650 per year, or about $54 per month.
  • In most cases, it takes 30 days after purchase for a policy to take effect, so it’s important to buy insurance before the storm approaches and the floodwaters start to rise.
  • In a high-risk area, your home is more likely to be damaged by flood than by fire.
  • Even though flood insurance isn’t federally required, anyone can be financially vulnerable to floods. In fact, people outside of mapped high-risk flood areas file nearly 25% of all NFIP flood insurance claims and receive one-third of Federal Disaster Assistance for flooding.
  • Joining the National Flood Insurance Program, FEMA 496

Two Types of Flood Insurance Coverage

The NFIP’s Dwelling Form offers coverage for:

1) Building Property, up to $250,000, and

2) Personal Property (Contents), up to $100,000.

The NFIP encourages people to purchase both types of coverage.  Your mortgage company may require that you purchase a certain amount of flood insurance coverage.  For information about your specific limits of coverage and deductibles, refer to the Declarations Page in your flood insurance policy.  It is also a good idea to review your policy with your insurance agent or company representative.


Risk

  • Flooding is unpredictable. It can impact anyone—whether your property is inside or outside of the high-risk flood area.
  • Properties in high-risk areas known as a Special Flood Hazard Area (SFHA) have at least a one-in-four chance of flooding during a 30-year mortgage.
  • You do not need to live near water to experience flooding.
  • Twenty percent of all flood insurance claims come from properties outside of the high-risk flood areas.
  • Floods are caused by storms, melting snow, hurricanes, water backup due to inadequate or overloaded drainage systems, and broken water mains.
  • In the past several years, about 75 percent of all declared disasters involved flooding.

 

Prepare

  • You can’t control the weather but you can prepare for it. Buy flood insurance before a flood happens, otherwise you won’t be covered.
  • Flood insurance policies typically take 30 days to go into effect. If you wait to purchase a policy until after a flood event threatens or occurs, your property won’t be protected from the damage caused by that flood event.
  • Most renters and homeowners insurance policies do not cover flood damage, and flood insurance policies don’t automatically renew.
  • Flood insurance isn’t just another monthly fee for owning or renting a home. It’s an investment in the well-being and resiliency of your family.
  • About 80 percent of households impacted by hurricanes last year (2017) did not have flood insurance.
  • Insured survivors are able to recover faster and more fully from a flood than their uninsured neighbors.

 

Value

  • Floods are the most common and costly natural disaster in the U.S. Why risk being without flood insurance?
  • The average property owner can purchase flood insurance for less than $2 a day.
  • One inch of water in a home could cost more than $25,000 in flood damage.
  • It’s a small price to pay for peace of mind.
  • In 2016, the average flood insurance claim to policyholders in the U.S. was $62,000.
  • The average FEMA disaster assistance grant is less than $5,000.

 

Protect

  • Protect the life you’ve built by purchasing flood insurance today.
  • Contact your insurance agent or visit floodsmart.gov to learn more about your flood risk and flood insurance options.
  • If you are interested in purchasing flood insurance, your homeowners, renters, or business insurance agent may be able to help you.
  • You can also reach the National Flood Insurance Program (NFIP) Help Center for questions about flood insurance at 1-800-427-4661.

FloodSmart.gov

January 2019

The updates to FloodSmart.gov incorporates social science and website usage research as well as best practices for a streamlined and customer-centric experience.  The next phase of the website launch will include insurance agent toolkits, social media templates, marketing tools, and flood map change toolkits.

For Consumers, the website focuses on flood insurance …

  • Why Buy or Renew
  • How to Buy or Renew
  • Understanding Costs
  • Before and After a Flood

The BIG Cost of Flooding – Interactive Tool – Whether people in your community end up having to repair or replace their building and or its contents, recovering from flood damage is expensive!  Most homeowners’ and renters’ insurance policies do not cover flood damage, so it is important for citizens to speak with their insurance agent or company to find what their policies cover.

To help communicate some of these costs to people, Floodsmart.gov has created an interactive tool to show people the flood recovery costs of several different flood depths for multiple home sizes.  To see the interactive tool, visit https://www.floodsmart.gov/costOfFlooding/index.html.

FloodSmart.gov is the official website of the National Flood Insurance Program (NFIP).