Why You Need Flood Insurance

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Pawcatuck River on the rise

As we witnessed with this past weekend’s storm, Mother Nature can create a great deal of damage in a very short span of time. This weekend’s storms brought not only a deluge of rain, but extremely high tides enhanced by high winds. Numerous communities were overwhelmed with flooding and the subsequent damage. And if you don’t have flood insurance, and flood damage is not covered by your standard home or renters policy.

So what is the National Flood Insurance Program (NFIP)? “The NFIP aims to reduce the impact of flooding on private and public structures.” The NFIP does this by providing property and business owners as well as renters affordable access to flood insurance. These insurance policy premiums are underwritten by the FEMA to ensure that the premiums are affordable.

The NFIP allows communities to participate in the flood insurance program if they are willing and able to enforce floodplain management regulations. These floodplain regulations dictate building requirements for new structures to reduce potential flood damage. It also encourages communities to improve infrastructure to direct potential flood waters away from existing and future structures. This could be installing sewer/drainage systems in flood-prone areas to carry water away, or minimum elevation requirements for new buildings to be above average flood surge heights.

So Why Do I Need Flood Insurance?

Rhode Island and Connecticut both participate in the NFIP and therefore everyone has the opportunity to have a flood insurance policy, including renters. So why do you want a policy? Here are six benefits of having a flood insurance policy.

  1. Floods are the most common and expensive natural disasters, costing billions of dollars a year.
  2. EVERYONE lives in a flood zone! Flooding can and will happen anywhere, with 20% of all claims coming from outside high-risk flood zones.
  3. Your standard home or renters policy does not cover flood damage.
  4. Flood insurance policies pay for damage regardless of whether a Presidential Disaster Declaration is made.
  5. Your flood insurance policy provides for comprehensive coverage and more funds for damage than is available through small business loans or FEMA grants, which are only available IF a Presidential Disaster Declaration is made; and you don’t have to pay back flood insurance claims payments1.
  6. If you have a federally regulated and/or insurance mortgage, your mortgagee will require you to have a flood policy depending on the location of the property and/or their own rules.

While it may be easy to see the benefit and need for flood insurance if you live in a high-risk area, why would you want a policy is you do not live in a high-risk zone? March 2010. After two weeks of steady rain on the frozen ground, the massive deluge on March 29th caused flooding in areas that had never seen flooding before, causing tens of thousands of dollars of damage to structures that had no flood insurance. Unfortunately, these owners and renters were then left to apply for small business loans, which need to be paid back or apply for FEMA grants, which have a funding cap and do not provide full damage/repair funds.

As the skies darken and we prepare for another potential ‘noreaster this Wednesday and march toward our rainy season, now is a great time to give us a call or send an email so we can discuss the benefits with you of a flood policy.

 

  1. FEMA’s Estimated Flood Loss Potential data sheet provides insight into potential costs based on the size of the structure, value of contents and level of flooding.

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