Flood Insurance Puts Homeowner in Control

Main Content
Release date: 
October 12, 1999
Release Number: 
1297-24

NEW CASTLE, Del. -- Many Delaware residents live under a threat they have not protected themselves against.

A number of those same people are now in debt because they did not protect themselves.

In New Castle County alone, approximately 10,000 people live in areas of high flood risk, according to a county study. Yet only 1,422 flood insurance policies have been taken out in the entire county.

In less than four weeks since Hurricane Floyd flooded the county, residents affected by the disaster have been approved for more than $800,000 in low-interest disaster loans from the U.S. Small Business Administration (SBA).

"If people had flood insurance," says Michael Powell, coordinating officer for the National Flood Insurance Program (NFIP) in Delaware, "a lot of that damage would have been paid for in cash. Homeowners, business owners and renters who live in a floodplain should join the national movement for people to protect themselves by buying flood insurance."

Anyone can buy flood insurance if he or she lives in a community that participates in NFIP except for those in some coastal areas. All communities in Delaware with special flood-hazard areas participate in the program except the towns of Bridgeville, Georgetown, Felton and Odessa.

"Year in and year out, flooding is the leading cause of property loss from natural disasters in this country," Powell said. "All too often, homeowners learn after the fact that protection against flood loss is not part of their homeowners insurance package."

People who live outside high-risk zones can buy flood insurance at greatly reduced rates under a preferred risk policy. The preferred risk policy is designed for one- to four-family residential buildings located in low-to-moderate flood-risk zones. Their owners can purchase flood insurance very cheaply, even though these areas also are exposed to a significant flood risk. Approximately 30 percent of flood insurance policyholders live outside a floodplain, but flood insurance is available to all residents who reside in communities that participate in NFIP.

The average flood insurance policy in Delaware costs approximately $459 per year for $119,500 coverage. Mortgage lenders require flood insurance on federally insured mortgages, but this is for the structure only. Homeowners still have the option to purchase flood insurance for the contents of their homes.

One of the questions most often asked about flood insurance coverage pertains to basements. The flood insurance structure policy will cover the critical facilities in the basement such as the furnace, hot water heater and air conditioning units. The flood insurance contents policy will cover the washer, dryer or freezer located in the basement. Neither the structure nor the contents policy will cover stored items, furnishings, finished walls, floors and ceilings.

Ninety percent of flood events are never declared federal disasters. Those with flood insurance do not have to rely on being in an area that is presidentially declared because flood insurance works with or without a presidential disaster declaration. Also, most people who get federal assistance in natural disasters, such as the current one in Delaware, receive it in the form of low-interest disaster loans from SBA.

Benefits of NFIP coverage include:

  • Eligibility for secured financing to buy, build or improve structures in special flood hazard areas - Lending institutions that are federally regulated or insured must see evidence of flood insurance coverage before they grant secured financing.

  • Less expensive than federal disaster loans - Average annual premiums for NFIP coverage are significantly less expensive than loan payments, even when those loans are granted under favorable terms.

  • Reduced rates - Buildin...
Last Updated: 
July 16, 2012 - 18:46
State/Tribal Government or Region: 
Related Disaster: 
Back to Top