What The Flood? What You Need To Know About The NFIP

I started this blog as an historical walk down the National Flood Insurance Plan memory lane; with the intention of breaking down the insurance gibberish to help the average homeowner understand how we got to where we are with the NFIP. BUT the copious amounts of research I’ve been doing has led me in a slightly different direction. I now realize that there has been an increase in the percentage of property owners that DO NOT have flood insurance, despite an increase in flood disasters. So let’s take a down and dirty look at flood insurance and why you need it.

  1. EVERYONE lives in a flood zone. True, not all flood zones are created equally, but flooding can and does occur everywhere. Let us not forget the massive flooding in traditional “non-flood” prone areas in March 2010. Winter frozen ground and two weeks of steady rain meant that homes that had never had a drop of moisture in the basement suddenly had three feet of standing water.
  2. Did you know that 20% of all flood insurance claims come from “low risk” areas? And in the past five years ALL 50 states have experienced floods or flash floods.
  3. Your homeowners policy DOES NOT COVER FLOOD DAMAGE! Period. End of story. The only coverage for flood damage to your property comes from a flood policy. There is a 30 day waiting period to enact the policy through the National Flood Insurance Program, so NOW is the time to get a quote. There are few private market companies that offer flood insurance and may be able to issue a policy sooner if you are concerned and want to be covered sooner rather than later.
  4. It may not be as expensive as you think. If you live in a preferred risk zone, you could see a flood policy premium that only costs a few dollars a day. Even if you live in a high risk zone, the NFIP is underwritten by the government and policy premiums max out at a relatively low level.
  5. Participants in the NFIP receive financial assistance faster than traditional insurance claims. Because the NFIP is backed by the government, the funds are at the ready to start paying as soon as possible.
  6. Mother Nature does not tell time, therefore if you are hoping that a “100 year storm” only shows up every 100 years, you will be sorry. The week of Hurricane Harvey we saw THREE active hurricanes (Katia, Harvey & Irma).
FEMACostOfFloodInsVFloodDamageCosts
*Each policy is unique and pricing may differ, but an average loss of $39,000 equals ~55 years of a $700/annual premium.

For most people, their home is the largest investment and providing sufficient insurance to protect this investment is crucial. If you have any questions about your property’s need for flood insurance, call our office. We are well versed in the NFIP and are more than happy to help you weigh the pros of being insured against floods.

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