INDIANAPOLIS, Ind. -- If you had a 1 in 4 shot of winning the lottery, would you buy a ticket? Yeah, and so would several million other people, right? Those are very good odds of winning. Well, you can bet you will never see those odds in the lottery, but those are the actual odds that over the course of a 30 year mortgage your home will be hit by a flood. Yet very few people protect themselves against such a "probable" occurrence with flood insurance.
According to the National Flood Insurance Program (NFIP) Web site (www.FloodSmart.gov), as little as one to four inches of water in the home can cost a homeowner $7,800. This includes the cost of replacing soaked drywall, carpets and base moldings, etc. Add just one more inch of water (5 inches) and the cost leaps to $11,480 as the flood damages more of the structure and its contents. As the water inside the house rises, so does the cost of repair and replacement. Eighteen inches of water equals $26,285.
Your homeowner or renter insurance policy does not cover floods. Would anyone think of having homeowner insurance that didn't cover fire damage? Yet, most homeowners are much more likely to experience a flood than a fire. Just because you're not located in a floodplain is no guarantee of safety. Almost a third of all flood losses last year were in areas that were not considered high risk for flooding. Flash flooding can happen almost anywhere.
Flood insurance is available to most Hoosiers regardless of whether they live in a flood plain or not. NFIP is a Federal program enabling property owners in participating communities to purchase insurance protection against losses from flooding. Policies are sold by private insurers. Chances are you can buy it from your current licensed insurance agent.
If your home is damaged by disaster, the goal of federal assistance is to get you on the road to recovery and ensure you have a safe and sanitary place to stay. It cannot and will not cover all your losses.
Currently the Federal Emergency Management Agency (FEMA) maximum disaster assistance grant (set by law) is $28,800. Only those who suffer the most significant damage will get the maximum. The vast majority of disaster victims will get a portion of that amount. Repair and replacement costs above and beyond available assistance are either covered by the property owner "out of pocket" or by taking on additional debt.
An NFIP policy is designed to provide an insurance alternative to disaster assistance to meet the escalating costs of repairing damage to buildings and their contents caused by floods.
Participation in the NFIP is based on an agreement between local communities and the Federal Government that states if a community will adopt and enforce a floodplain management ordinance to reduce future flood risks to new construction in Special Flood Hazard Areas, the Federal Government will make flood insurance available within the community as a financial protection against flood losses.
With policies starting as low as $119 per year, flood insurance is a safe bet. To find the location of a nearby agent who sells flood insurance visit www.FloodSmart.gov.
FEMA coordinates the federal government's role in preparing for, preventing, mitigating the effects of, responding to, and recovering from all domestic disasters, whether natural or man-made, including acts of terror.