WASHINGTON, D.C. -- With hurricane season officially beginning June 1, officials of the Federal Emergency Management Agency (FEMA) are encouraging renters and property owners -- especially those in Atlantic and Gulf Coast states -- to purchase flood insurance policies now to provide financial protection from floodwaters and storm surge.
"Buying flood insurance is one of the most important things anyone can do to help themselves recover from flood damage," FEMA Director James Lee Witt said. "We're making a concerted effort to communicate that message to the residents of hurricane-prone states before this year's storms start heading their way. We can't stop hurricanes or the widespread floods they cause, but we can prevent them from ruining people's lives."
The National Flood Insurance Program (NFIP), administered by FEMA, makes federally backed flood insurance available in communities that adopt and enforce floodplain management ordinances to reduce future flood losses. Currently, more than 4.1 million policies representing over $485 billion worth of coverage are in force in more than 19,000 participating communities.
"Flood damage -- unlike wind damage -- is not covered by homeowner's or business insurance policies," Witt said. "This coverage must be purchased separately and is available only in communities that participate in the NFIP. And people need to keep in mind that there is a 30-day waiting period before a new flood insurance policy becomes effective."
Witt also had a warning for people who think they can rely on federal disaster assistance in lieu of flood insurance. "Disaster assistance is only available when the President issues a major disaster declaration," he said. "Even then, it is quite limited---and usually in the form of a loan that must be repaid with interest. It is hardly a substitute for flood insurance, which also covers losses from small, localized flood events."
"Flood insurance may be purchased through most insurance companies and licensed insurance agents," said Jo Ann Howard, administrator of the Federal Insurance Administration, the part of FEMA that manages the NFIP.
Howard said the maximum coverage amounts for a single-family home are $250,000 for the structure and $100,000 for its contents. Renters may also purchase up to $100,000 of coverage for their personal belongings. Maximum coverages for businesses are $500,000 for buildings and $500,000 for contents.
Howard also pointed out that there are two important exceptions to the 30-day waiting period. First, there is no waiting period following the initial purchase of flood insurance when that purchase is in connection with making, increasing, extending or renewing a mortgage or construction loan; the policy will become effective upon loan closing. Secondly, there is no waiting period if the initial purchase occurs during the 13-month period following the revision or updating of a flood insurance rate map; in this case, the policy will go into effect at 12:01 a.m. the day after purchase.
The NFIP is a self-supporting program. All claims and operating expenses are paid from policyholder premiums, not tax dollars. Furthermore, it is estimated that flood insurance saves approximately $800 million annually in taxpayer-funded disaster relief costs.
For information about flood insurance, property owners should contact their insurance agent or call the NFIP's toll-free information line at 1-800-427-4661.