Phoenix, AZ -- In the aftermath of October's flooding in Arizona, disaster officials are asking homeowners, renters and business owners throughout the state to consider buying flood insurance coverage through the National Flood Insurance Program (NFIP).
"Year after year, flooding is the leading cause of property loss from natural disasters in this country," FEMA Federal Coordinating Officer David Fukutomi said. "But flood insurance isn't part of the normal homeowners insurance policy. All too often, homeowners learn too late that they aren't covered against flood loss."
"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," Fukutomi added.
"Most floods are not declared disasters," said State Coordinating Officer Michael P. Austin. "When that's the case, insurance becomes the sole source of assistance for people who are flooded out."
You don't have to be in a floodplain to buy flood insurance. Flood insurance is available to residents of communities that have agreed to adopt and enforce sound floodplain management practices. Nearly all Arizona's cities and 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 flood insurance coverage include:
Eligibility for secured financing to buy, build or improve structures in a special flood hazard area. Federally regulated or insured lenders must see evidence of NFIP coverage before they grant secured financing.
Protection against being uninsured in the event of a flood. Standard homeowners insurance policies do not compensate for flood damage.
Flood insurance is cost-effective. In most disasters, flood victims who apply for assistance from FEMA to repair their homes and businesses receive most of their assistance in the form of low-interest loans from 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 the average annual flood insurance policy premium is $326 a year for $100,000 in coverage.
Broad coverage. Flood insurance covers losses even if the flood is not declared a disaster.
People who receive some forms of federal flood disaster assistance are required to buy 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 buy 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 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. Coverage for flood-caused damage to basements includes structural elements and basic items used to service the building such as furnaces, water heaters, utility connections, etc. Flood damage to personal belongings is covered only if the policyholder purchases contents coverage.
If you have a home business, a separate NFIP policy is necessary to cover damage to the structure or its contents. Flood insurance is available through most licensed property and casualty insurance agents in good standing with state insurance authorities. If your agent does not handle flood insurance, call 1-800-472-9662 to locate an agent in your area. There is a 30-day waiting period from the date of application before the policy becomes effective, but a p...