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.