Frankfort, KY -- In the aftermath of February flooding, disaster officials are reminding homeowners throughout Kentucky that they may purchase flood insurance coverage through the National Flood Insurance Program (NFIP). The NFIP is administered by the Federal Insurance Administration, a part of the Federal Emergency Management Agency (FEMA).
Deputy State Coordinating Officer Cash Centers noted that "flood insurance is very important. Many flood events are not declared disasters and thus insurance becomes the sole source of assistance for victims."
"Year in and year out, flooding is the leading cause of property loss from natural disasters in this country," FEMA Federal Coordinating Officer Scott Wells said. "But all too often, homeowners learn after the fact that protection against flood loss is not part of their normal insurance protection package."
"There are about 11 million buildings located in designated flood hazard areas in the United States, yet less than 23 percent of them are insured against floods," Wells added.
Flood insurance is available to residents of communities that have agreed to adopt and enforce sound floodplain management practices. Nearly all Kentucky's counties have done so. To find out whether their community is participating in the NFIP program, homeowners can contact their local government, or call the NFIP toll-free hotline, 1-800-427-4661.
Benefits of NFIP coverage include:
- Eligibility for secured financing to buy, build or improve structures in special flood hazard area. Lending institutions that are federally regulated or insured must see evidence of NFIP coverage before they grant secured financing.
- Protection against being uninsured in the event of a flood. Standard homeowner's insurance policies do not compensate for flood damage.
- Flood insurance is cost-effective. Most flood victims who apply for assistance from FEMA to repair their homes and businesses receive it in the form of low-interest loans administered by the U.S. Small Business Administration. Premiums for flood insurance are far less than the payments for a disaster loan. The average monthly payment for a $75,000 SBA loan is $360, while in Kentucky the average annual flood insurance policy premium is $326 a year for $106,000 in coverage.
- Broad coverage. Flood insurance covers losses even if the flood is not declared a disaster.
- Reduced risk of flooding. Buildings substantially damaged by flood, if rebuilt to NFIP new construction standards, have less risk of damage from flooding and are eligible for NFIP coverage at a reduced rate.
- People who receive some forms of federal flood disaster assistance are required to purchase flood insurance if they live in a Special Flood Hazard Area. Federal law now requires people who receive assistance through SBA disaster loans or individual and family grant programs to purchase and maintain flood insurance as a condition of receiving assistance. If they don't, repeat victims may be ineligible for some assistance programs in the future.
Flood insurance coverage is available for residential and non-residential buildings, as well as for contents. Homeowners who carry national flood insurance are covered for any flood-related damage to the ground level or upper floors of their homes. Flood damage to personal belongings is covered only if the policyholder purchases contents coverage. Coverage for flood-caused damage to basements is limited to structural elements and basic items used to service the building such as furnaces, water heaters, utility connections, etc.
If you have a home business, a separate NFIP policy is necessary to cover structural or contents damage. Flood insurance ...