PISCATAWAY, N.J. -- When Tropical Storm Floyd hit 28,389 New Jersey residents had taken one good step to prepare for the deluge.
They were the ones who had flood insurance.
"These residents were prepared," said Federal Coordinating Officer Pete Martinasco of the Federal Emergency Management Agency (FEMA)."The smartest thing these property owners did was to purchase flood insurance. It's one of the wisest investments you can make in protecting against future loss of homes and properties."
Disaster recovery assistance programs are important in helping flood survivors get back on their feet. But there's no substitute for the benefits flood insurance provides through the National Flood Insurance Program (NFIP). And, since standard homeowners' insurance doesn't cover flood damage, people need to purchase flood insurance separately.
"Flood insurance can provide financial relief from flood damages to buildings and contents," said State Coordinating Officer Lt. Ed O'Neil of the New Jersey Office of Emergency Management. "People will find that it's better to pay a few hundred dollars annually than to repay a loan of several hundred dollars monthly to rebuild a home."
Congress enacted the National Flood Insurance Program in 1968 to provide flood insurance for all structures in communities that agree to regulate building in their floodplain areas. Before Congress adopted the program, many communities allowed flood-damaged properties to be rebuilt repeatedly in the same flood-prone areas without any attempt to reduce the risk of future flooding.
Flood insurance is required by federally regulated or insured lending institutions before they offer loans. Structures that are substantially damaged are required to be rebuilt to new construction standards. Structures rebuilt to NFIP new-construction standards are less subject to flood damage and are eligible for reduced rates.
Lenders will require individuals to purchase flood insurance if:
- Their property is on a flood plain.
- They are refinancing an existing mortgage property on a flood plain.
People don't have to live in high-risk areas to purchase flood insurance.
And, most importantly, O'Neil also warned, people don't have to live in a flood zone to get flooded, as was the case in the recent storm
Individuals who receive assistance from the state-administered Individual Family Grant Program will automatically get a three-year flood insurance policy. After three years, the individual must renew that policy at their expense or risk not receiving federal assistance in a future disaster.
If their communities participate in the federal NFIP, they will be able to purchase flood insurance and obtain federally underwritten loans or mortgages to rebuild or repair flood-damaged properties. Flood insurance also is available for rental properties.
Martinasco offered these flood insurance tips to property owners:
- Your policy should also cover the contents of buildings.
- Don't be underinsured. Your policy should reflect current property values.
- If you're a renter, consider buying your own policy for furniture and other personal belongings.
"Flood insurance not only protects its policy holders, it saves taxpayers millions of dollars when floods hit communities," noted Martinasco. "The actual payout from the NFIP to flood victims comes from insurance premiums paid by policy holders, not the federal taxpayer."
FEMA continues to be committed to lessening the impact of disasters by paving the way for building disaster-resistant communities, he added.
"Initiatives like Project Impact: Building Disaster Resistant Communities changes the way America deals with disasters," Martinasco said. "Trenton and Rahway are examples of forward-t...