Flood Insurance -- A Key to Recovery
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Flood Insurance -- A Key to Recovery

   

Flood Insurance -- A Key to Recovery1

Regina Fegan and Michael T. Olexa2

Relying solely on federal disaster assistance is BAD STRATEGY!

  1. Federal disaster assistance is only available if a flood is declared a Federal disaster. More than 90 percent of all disasters in the U.S. are not Presidentially declared.

  2. Disaster aid usually comes in the form of loans, which must be repaid with interest.

  3. Most homeowners' policies do not cover flooding.

Federal flood insurance reimburses you for flood damage! Even if a disaster has not been declared!

A. What is the National Flood Insurance Program?

The Federal Emergency Management Agency's (FEMA) Federal Insurance Administration makes the National Flood Insurance Program (NFIP) available to residents of communities that adopt and enforce floodplain management ordinances that represent sound land use practices.

It doesn't matter whether your flood risk is high, medium, or low, you can buy flood insurance as long as your community participates in the National Flood Insurance Program. (Go to <http://www.fema.gov/pdf/nfip/f025_how.pdf > to find out how your community can participate in the NFIP.)

And, it's a good idea to buy even in low or moderate risk areas: almost 25 percent of all flood insurance claims come from low- to moderate-risk areas. (Go to <http://www.fema.gov/business/nfip/prphome.shtm > to find out about the low-cost policy for homes in low- to moderate-risk areas.

B. Why should you get National Flood Insurance?

You don't need to live near water to be flooded. Floods are caused by storms, melting snow, hurricanes, and water backup due to inadequate or overloaded drainage systems, dam or levee failure, etc.

The average flood insurance policy costs:

In comparison, a disaster home loan can cost you

If you live in a Special Flood Hazard Areas (SFHAs), federally regulated lending institutions will require flood insurance to get secured financing to buy, build, or improve structures. The law requires flood insurance in an amount equal to the outstanding principal balance of the loan, the value of the building, or the maximum limit of coverage available under the Act, whichever is less. It also requires flood insurance to be maintained for the life of the loan.

C. When should you get National Flood Insurance?

PLAN AHEAD! There is usually a 30-day waiting period before the coverage goes into effect.

D. How do you get National Flood Insurance?

You can buy NFIP flood insurance from private insurance companies and agents; call yours today!

By visiting the following Web site:

<http://www.floodsmart.gov/floodsmart/pages/agentsearch/searchform.jsp >,

you can locate private insurance companies in your area that, through an agreement with the Federal Insurance Administration, sell and service Federal flood insurance policies. You may also contact your insurance agent or company.

Sources of This Publication

Federal Emergency Management Agency (FEMA), Answers to Questions About the National Flood Insurance Program. Access on the Web at: <http://www.fema.gov/business/nfip/qanda.shtm >.

Federal Emergency Management Agency (FEMA). Flood: Are You Protected from the Next Disaster? Access on the Web at: <http://www.fema.gov/business/nfip/flood.shtm >,

Federal Emergency Management Agency (FEMA). Nothing Could Dampen the Joy of Home Ownership...Or Could It? Access on the Web at: <http://www.fema.gov/business/nfip/dampen.shtm >.

Federal Emergency Management Agency (FEMA). Things You Should Know About Flood Insurance. Accessed on the Web at: http://www.fema.gov/nfip/things.htm. [no longer available online]

Federal Emergency Management Agency (FEMA). Top 10 Facts Every Consumer Needs to Know About the NFIP. Access on the Web at: <http://www.fema.gov/pdf/nfip/f301_consumer.pdf >.

Federal Emergency Management Agency (FEMA). What You Need to Know About Federal Disaster Assistance & National Flood Insurance. Access on the Web at: <http://www.fema.gov/pdf/nfip/f001_know.pdf >.

Footnotes

1. This document, IFAS publication DH0434, was published June 1998, revised May 2003. It is part of The Disaster Handbook, a component of the Comprehensive Disaster Preparedness and Recovery Education Module. For information about products and ordering, please visit: <http://disaster.ifas.ufl.edu>. All UF/IFAS Extension publications are available at the EDIS Web site: <http://edis.ifas.ufl.edu>.

2. Regina Fegan, student, Levin College of Law, University of Florida; and Michael T. Olexa, professor, Department of Food and Resource Economics, Institute of Food and Agricultural Sciences (IFAS), University of Florida, Gainesville, 32611.

Note: This publication is designed to provide accurate, current, and authoritative information on the subject. However, since the laws, regulations, administrative rulings, and court decisions on which it is based are subject to constant revision, portions of this publication could become outdated at any time. This publication is distributed with the understanding that the authors are not engaged in rendering legal advice or opinions, and the information contained herein should not be regarded, or relied upon, as a substitute for legal advice or opinion. For these reasons, the utilization of these materials by any person constitutes an agreement to hold harmless the authors, the Institute of Food and Agricultural Sciences and the University of Florida for any liability claims, damages or expenses that may be incurred by any person as a result of reference to or reliance on the information contained in this fact sheet.

The Institute of Food and Agricultural Sciences (IFAS) is an Equal Opportunity Institution authorized to provide research, educational information and other services only to individuals and institutions that function with non-discrimination with respect to race, creed, color, religion, age, disability, sex, sexual orientation, marital status, national origin, political opinions or affiliations. For more information on obtaining other extension publications, contact your county Cooperative Extension service.

U.S. Department of Agriculture, Cooperative Extension Service, University of Florida, IFAS, Florida A. & M. University Cooperative Extension Program, and Boards of County Commissioners Cooperating. Larry Arrington, Dean.


Copyright Information

This document is copyrighted by the University of Florida, Institute of Food and Agricultural Sciences (UF/IFAS) for the people of the State of Florida. UF/IFAS retains all rights under all conventions, but permits free reproduction by all agents and offices of the Cooperative Extension Service and the people of the State of Florida. Permission is granted to others to use these materials in part or in full for educational purposes, provided that full credit is given to the UF/IFAS, citing the publication, its source, and date of publication.