5 Things You Should Know About Flood Insurance

For many communities in the United States, flooding is a potential disaster that can strike land and homes. Often home owners are caught unaware of realities of flood insurance and government disaster assistance and they can end up losing everything in major flood. To help you better understand and assess your need for flood insurance, here are five things you should know about it:

1. Home owner’s insurance is not flood insurance: Flood insurance is sold separate from Home owner’s insurance and your home owner’s insurance does not typically protect your home and its’ contents from damage by flooding. This means residents looking to protect themselves and their property from flooding, will need to seek out and purchase flood insurance.
2. Flood insurance is not available everywhere: Only communities that participate in the National Flood
   Insurance Program, have this insurance available. According to FEMA (Federal Emergency Management Agency) there are some twenty thousand such communities in the United States. Although, some of these communities are considered low risk areas, if flood insurance is available in your area, you probably need it. For property in some high risk areas you may be required to purchase flood insurance, in particular if you are taking out a home loan from a federally regulated lender.
3. Flood Insurance is Subsidized: The National Food Insurance Program is a federally backed insurance program. This means it comes with affordable rates. FEMA’s flood insurance brochure indicates that home owners will pay around $400.00 annually for $100,000.00 in coverage. They also indicate that paying back the same amount in federal assistance can cost $240.00 a month, for a period of 30 years!
4. Flood insurance is better than Disaster Recovery assistance: Assistance from the federal government will only be available if a flooding event is declared a national disaster and even then help could be slow coming. Flood insurance will protect you even if the event and damage do not reach the proportions required for a national disaster to be declared. In addition, Federal disaster assistance can come in the form of loans that you have to pay back.
5. Coverage is available for most needs: Flood insurance can be purchased for residential or commercial properties and is available not only to owners, but property renters as well. Coverage ranges from $250,000.00 for a single family, or smaller multi-family home, with an additional 100,000 to cover the contents of the home, to $500,000.00 for non-residential buildings and another 500,000.00 for contents of non-residential buildings. Non-residential includes small businesses.