Challenge
The year 2017 was difficult for most Puerto Ricans. The island was already going through a financial crisis, when in September, Hurricane María, a Category 4 storm, brought flooding that wreaked havoc on the island. There were areas impacted that had never flooded before. Millions in real and personal property losses. Without flood insurance, the cost to recover can be extensive. Most residents and businesses must pay out of pocket or take out loans to replace damaged items.
Solution
That was not the case for María Teresa Vélez. For thirty years, she and her family have lived in a cozy house that she inherited from her parents in Barrio Las Vegas, Mayagüez. After the hurricane, they faced flood damage that amounted to more than $39,000.
In 1998 the Velez family purchased their first National Flood Insurance Program policy and have maintained it annually. This financial resource helped with the recovery efforts.
“After María, we received $39,659. It was much more than we expected,” said Marite Vazquez, the survivor’s daughter. “We could replace everything that was lost or damaged. There are a few things still to be fixed, but we received the money to do so. I would tell everybody living in a flood risk zone that having flood insurance is unquestionably a must.”
The National Flood Insurance Program is an option for property owners, renters and businesses that features low deductibles and comprehensive coverage. Communities can join the by adopting and enforcing floodplain management regulations. In exchange, residents in participating communities can purchase flood insurance for homes and personal belongings. In addition, flood insurance covers private and public structures to reduce the socio-economic impact of disasters.
Vélez’s house is in a minimal flood risk area. During the storm, a nearby river overflowed and entered the house damaging everything the muddy waters touched. “I don’t know what would have been of us without flood insurance. Financially, it would have been very challenging to replace 20 years of hard work and hard-earned possessions, trying to secure a comfortable life according to our means”, said Vélez.
In September 1998, Hurricane Georges had also flooded their home. At the time, FEMA enrolled their house to the Group Flood Insurance Program, a program that purchases flood insurance policy certificates for the properties located in high-risk flood areas. These flood insurance premiums are paid for three years and when expired, the law requires the property’s owner(s) to obtain and maintain flood insurance for the life of these properties. Not meeting this requirement would result in losing eligibility for any future FEMA disaster assistance after a flood.
After Velez’s GFIP policy expired in 2001, she enrolled in the program as required. At the time, she paid $171 annually, gradually increasing to the current premium of $271.
Flood insurance represents financial protection and peace of mind. Puerto Rico is susceptible to flooding and no home is completely safe from it. Damage from just an inch of water can cost more than $25,000. Having adequate coverage can be the difference between recovering or being financially devastated. For Velez, paying nearly $3,200 a year helped provide nearly $40,000 when the family needed it.
Also, flood insurance claims can be filed and paid even when there is not a major disaster declaration. After a federal declared disaster, federal assistance available to survivors is limited and includes the following: 1) the U.S. Small Business Administration, a loan offered to disaster survivors to be paid back with low-interest and 2) a grant from the FEMA’s Individuals and Households Program, averaging about $5,000 per household.
Key Takeaways
- You don’t have to live in flood zone to flood. Learn about your flood risk by accessing the FEMA Map Service Center.
- Learn more about the National Flood Insurance Program or call your insurance agent or company to find out if your community participates in the program.
- Visit Floodsmart.gov to learn on how much flood damage could cost after an event.