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If you’re among the lucky whose street has never flooded, maybe you and your neighbors think you never have to worry about flooding. Unfortunately, that could be a costly oversight. Ninety percent of all natural disasters in the U.S. involve flooding. As the most frequent severe weather threat, flooding is also the costliest. Everyone lives in a flood zone – even you. The difference is that some properties are more at risk than others.
You may live miles from the ocean. Yet, coastal storm surge can push water far inland into interior lakes and ponds. You may live blocks from the river, but heavy rainfall can bring the river to your doorstep – and beyond. Maybe there is no bed of water anywhere in close proximity. But there is tropical weather, and it has been known to stall for hours over one locale, overloading too many storm drains with too much water. Wherever it rains, it can flood.
A standard homeowners insurance policy does not cover flood damage. Since 1968, flood insurance has been available from the federal government through the National Flood Insurance Program (NFIP). Most mortgage companies require flood insurance for properties within high-risk areas and those adjacent to them. However, just because flood insurance is not required does not mean it is not needed.
The NFIP has a list of 20 flood facts, and notable among them is that homes in high-risk areas are more likely to be damaged by a flood than by fire. Despite that, over 20 percent of NFIP claims are paid out to those with flood insurance who live in low- to moderate-risk flood zones. And, just like the tides change, flood risk changes. New land development can change the usual rain runoff pattern, making areas newly vulnerable to flood damage. Additionally, new technology has brought more accuracy to flood maps, so some people who have never been in a flood zone before find themselves in one.
Floods can happen any time and any place, so understand your flood risk level. There’s an easy way to do so. Go to www.FloodSmart.gov, and plug your address into the box labeled “One-Step Flood Risk Profile.” It will help you rate your risk and provide an estimate of your annual flood insurance premium. Knowing your risk is just a start. Even renters need to consider flood insurance, as like a homeowners insurance policy, most renters policies do not cover flood damage.
A few inches of water can cause thousands of dollars of damage. The standard policy through the NFIP provides $250,000 worth of coverage for a home and $100,000 for contents. If your home and contents are valued at greater than that amount, additional insurance coverage can be purchased through private insurance companies. Your Frontline agent can point you in the right direction.
Many changes are coming for the government’s flood insurance program. You’ve probably read about the Flood Insurance Reform Act of 2012, also known as the Biggert-Waters Act. The intent of the law is to make the flood insurance program financially stronger, with the ability to handle claims payouts from storms like Hurricane Katrina (2005) and Superstorm Sandy (2012).
New flood insurance rates are being phased in, and these higher rates are triggered by buying or selling a property or when a flood policy is allowed to lapse. Although legislation is being proposed to delay these reforms, nothing should delay your understanding of flood risk and the steps you can take to be prepared. Talk to your Frontline agent about your flood insurance options.