How to Prepare for the Most Common of All Natural Disasters
Residents of the South know they must have insurance to protect their homes against tornadoes, hurricanes and fires, but you may not realize the importance of protecting your home against floods.
What many homeowners do not realize is that they are four times more likely to lose their home to a flood than a fire. You also may not realize that your homeowner’s policy does not cover flood damage.
According to Bankers Insurance Group, the city of Grand Forks, N.D. is a good example. In April 1997, Grand Forks experienced terrible flooding. The townspeople were warned about the impending danger, but when the Red River overflowed, less than 10 percent of the population had coverage. Many believed their homeowners policy would cover their flooding damage, and many felt flooding would never happen to them.
According to the National Weather Service, average annual flood losses total $4.5 billion a year. In order to protect yourself against floods it is best to “be aware and be prepared.”
What will you do if you are a victim of flooding and don’t have flood insurance?Now is the time to prepare yourself and your home for flooding, the most common of all natural disasters. It is best to be prepared with facts, statistics, flood zone information and as much flood education as possible.
Reasons Why People Don’t Purchase Flood Insurance
I’m not in a flood zone. This is a common response, but the fact is that when the community belongs to the National Flood Insurance Program (NFIP), the entire community has been mapped and assigned flood zones, from the highest mountain to the lowest valley. The zones indicate either high, moderate or minimal flood risk. What most people mean by this is that they are not in a high-risk flood zone.
I’m not in a high-risk flood zone. Great! However, NFIP history has shown that nearly 25 percent of all losses paid have been for buildings outside the high-risk flood zone. But the good news is that homeowners in these moderate and low-risk flood zones are eligible for discounted flood insurance under the Preferred Risk Policy. This policy provides building and contents coverage for as little as $106 a year.
My home isn’t going to be flooded-we’ve never been flooded before.Floods are the most common form of natural disaster. In fact, 80 percent of all Presidentially-declared disasters involve flooding. Homes located in a high-risk flood zone have a 26 percent chance of being flooded during the life of a 30-year mortgage compared with only a 4 percent chance of having a fire, yet almost nobody hesitates to get fire insurance.
It’s too expensive. For people who don’t carry flood insurance, their only assistance will come in the form of a loan. The average duration of a Small Business Administration (SBA) disaster home loan is 20 years and the monthly repayment amount for a $50,000 loan is $320. Depending on where you live, you can buy a flood policy with $50,000 coverage for about $171 a year.
And, the Facts to Overcome Them
Disaster assistance will be available if my home or business is flooded.I don’t need flood insurance. Before a community is eligible for disaster assistance, it must be declared a Federal disaster area. Federal disaster declarations are awarded in less than 50 percent of flooding incidents, and most forms of assistance are loans that must be paid back with interest.
Flood insurance is available only for homeowners. Flood insurance is available to protect homes, condominiums, apartments and non-residential buildings, including commercial structures.
You can’t buy flood insurance if you are located in a high-risk flood area or if your property has been flooded in the past.You can buy federal flood insurance no matter where you live if your community participates in the NFIP, except in Coastal Barrier Resources System areas and properties listed as disqualified under Title 1316, even if your building has been flooded repeatedly.
My property policy covers flooding.Unfortunately, many property owners do not find out until it is too late that property policies don’t cover flooding.
My basement is the only thing that will flood, and flood insurance won’t cover that.NFIP policies cover many basement elements, including cleanup expense and items such as furnaces, water heaters, washers and dryers, air conditioners, freezers, foundation elements, utility connections and pumps. The flood policy does not cover contents stored in basements or a finished basement’s contents or improvements such as finished walls, floors and ceilings.
A good place to start is with your Alfa agent. With the Alfa Agency, your agent offers flood insurance including a thorough look at the Fidelity National Property and Casualty Insurance Company (FNPAC) Flood Insurance Program.For more information on flood insurance, contact your local Alfa agent.
