Professional Insurance Programs

Myths and Facts About Flood Insurance

Flood insurance is one of those things you might not think about, especially if you don’t live near a body of water. While certain areas are prone to flooding, it can happen anywhere and at any time. Events such as spring thaws or heavy rains can easily be a cause flooding in your area. According to Fema.gov, floods are the No. 1 natural disaster in the United States. They also say all it takes is a few inches of water to cause major damage to your home and its contents.

Many of those affected by floods often will not have flood-related insurance coverage, under the National Flood Insurance Program (NFIP). Here are some myths and facts about the program, as provided by the Federal Emergency Management Agency (FEMA).

MYTH: You can’t buy flood insurance if you are located in a high-flood-risk area.

FACT: You can buy federal flood insurance no matter where you live if your community participates in the NFIP, unless your property is in an area covered by the Coastal Barrier Resources Act of 1982 (CBRA). The NFIP was created in 1968 to provide flood insurance to people who live in areas with the greatest risk of flooding, called Special Flood Hazard Areas (SFHAs) or the regulatory floodplain. In fact, under the National Flood Insurance Act, lenders must require borrowers whose property is located within a regulatory floodplain to purchase flood insurance as a condition of receiving a federally regulated mortgage loan. Lenders should notify borrowers that their property is located in a regulatory floodplain and that affordable federal flood insurance is available. Flood insurance on homes located above or outside the mapped floodplain is very affordable; insurance for homes deep in the floodplain may cost substantially more.

MYTH: You can’t buy flood insurance immediately before or during a flood.

FACT: You can purchase flood coverage at any time. There is a 30-day waiting period after you’ve applied and paid the premium before the policy is effective, with the following exceptions:

If the initial purchase of flood insurance is in connection with the making, increasing, extending or renewing of a loan, there is no waiting period. The coverage becomes effective at the time of the loan, provided application and presentment of premium is made at or prior to loan closing.

If the initial purchase of flood insurance is made during the one-year period following the adoption of a revised Flood Insurance Rate Map for a community, the waiting period is only one day.

The policy does not cover a ‘loss in progress’ defined by the NFIP as a loss occurring as of 12:01 a.m. on the first day of the policy term. In addition, the amount of insurance coverage cannot be increased during a loss in progress.

MYTH: Homeowners’ insurance policies cover flooding.

FACT: Unfortunately, many homeowners do not find out until it is too late that their homeowners’ policies do not cover flooding.

MYTH: Flood insurance is available only for homeowners.

FACT: Flood insurance is available to protect homes, condominiums, apartments and nonresidential buildings, including commercial structures.

MYTH: You can’t buy flood insurance if your property has been flooded.

FACT: It doesn’t matter how many times your home, apartment or business has been flooded. You are still eligible to purchase flood insurance provided that your community participates in the NFIP.

MYTH: Only residents of high-risk flood zones need to insure their property.

FACT: Even if you live in an area that is not flood-prone, it’s advisable to have flood insurance. One-third of the NFIP’s claims come from such areas.

Securing a flood insurance policy for your home is easy with the help of Professional Insurance Programs. Our Insurance Advisor can help you determine how much coverage you need and can provide you with information about how much you can expect to pay for different coverage amounts. Contact us at 800-637-4676 or info@profinsprog.com.