Flood Risk & Flood Insurance

The National Weather Service has declared March 16th through the 20th as Flood Safety Awareness Week, and today's topic is determining flood risk and the need for flood insurance.

In 1968, congress created the National Flood Insurance Program in response to the rising cost of taxpayer-funded disaster relief for flood victims and the increasing amount of damage caused by floods.

Flood losses are not covered by your homeowners insurance policy. Local flooding can happen in all parts of the country at almost any time of the year. But flooding is especially problematic in coastal locations prone to tropical cyclones. Flooding causes more damage in the United States than any other weather related event with an average of 4.6 billion dollars a year in the past 20 years.

How to determine if you live in a flood zone.
The Federal Emergency Management Agency, FEMA, has resources on their website that show what areas have been declared flood-prone. This determines whether or not you will be required by your mortgage company to obtain flood insurance. Much more information is available on their website, which is http://www.floodsmart.gov

How to obtain a flood insurance policy.
Even if you are not required to purchase flood insurance, you can purchase a policy to cover your property. You can purchase national flood insurance from private insurance companies and agents. In fact, you may be able to purchase it with a credit card. Currently, there are more than 100 insurance companies that sell national flood insurance coverage, in addition to some 60,000 independent insurance agents.

If the seller of the property has flood insurance coverage on the building, that policy can be assigned to the buyer at the time of closing. If the mortgage company requires flood insurance as a condition of the loan, the lender may escrow flood insurance premiums, making it easy to ensure that you will not get caught without flood insurance when a flood threatens your home.

Exceptions to Flood Insurance.
Anyone in a community that participates in the national flood insurance program can purchase building and/or contents coverage, with a few exceptions. Coastal barrier resources system areas, otherwise protected areas, and buildings principally below ground or entirely over water are not eligible for national flood insurance.