Flood Insurance: Dollars And Sense

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Release date: 
June 15, 2009
Release Number: 
1791-513

TEXAS CITY, Texas -- The figures are remarkable. Since 1978, Texans with flood insurance have received more than $5,013,776,416 in loss payments. In the last fiscal year alone, the National Flood Insurance Program (NFIP) paid out 46,507 claims to state policyholders to the tune of $2.03 billion.

And this year, water-logged state residents with and without flood insurance are faced with an enormous new set of rebuilding and repairing costs after Hurricane Ike.

"The numbers speak for themselves," said Brad Harris, federal coordinating officer helping oversee disaster recovery efforts. "But the most convincing case anyone can make for purchasing NFIP insurance is the increased peace of mind of knowing that you've protected your most valuable asset or personal property."

Flood insurance is available to any property owner or renter located in a community participating in the NFIP. Statewide, 1,162 Texas communities are enrolled in the program. All areas are susceptible to flooding, although to varying degrees; in fact, nationwide 25 to 30 percent of all flood claims occur in the low-to-moderate risk areas.

To get secured financing to buy, build or improve structures in Special Flood Hazard Areas (SFHAs) you will be required to purchase flood insurance. Lending institutions that are federally regulated or federally insured must determine if the structure is located in a SFHA and must provide written notice requiring flood insurance.

Harris said that misinformation and misunderstandings were the main reasons why many residents failed to look into obtaining flood insurance.

"It fills a huge gap in homeowner coverage at an affordable cost," Harris said. "It also can cover a renter's personal property as well as some nonresidential buildings such as farm and commercial structures in participating communities.

Harris addressed other misunderstandings that often arise:

  • Flood damage is not covered by homeowner policies. You can protect your home, business and belongings with NFIP insurance. You can insure your home with flood insurance for up to $250,000 for the building and $100,000 for your contents;
  • flood risk is. It doesn't matter whether your flood risk is high, medium or low, you can buy flood insurance as long as your community participates in the NFIP;
  • In some cases there may be a 30-day waiting period before the coverage goes into effect. Plan ahead so you're not caught without flood insurance when a flood threatens your home or business; and
  • Federal disaster assistance is not the answer. Federal disaster assistance is only available if the President declares a disaster. More than 90 percent of all disasters in the United States are not declared as federal disasters. Flood insurance pays even if a disaster is not declared. 

Nearly 20,833 communities across the United States and its territories participate in the NFIP by adopting and enforcing floodplain management ordinances to reduce future flood damage.

NFIP loss claims are not paid for by the taxpayer, but through premiums collected for flood insurance policies.

You can buy NFIP flood insurance through most major private insurance companies and licensed property insurance agents who sell homeowners' or property insurance or call the NFIP's toll-free information line at 800-427-4661, (TTY/TD) 800-427-5593.

FEMA leads and supports the nation in a risk-based, comprehensive emergency management system of preparedness, protection, response, recovery, and mitigation, to reduce the loss of life and property and protect the nation from all hazards including natural disasters, acts of terrorism, and other man-made disaster.

Last Updated: 
July 16, 2012 - 18:46
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