flood insurance

Flooding is the most common and costly natural disaster in the United States, causing billions of dollars in damage to hundreds of businesses and homes every year. Nevertheless, only 20% of American households are covered by flood insurance, which means that the rest are at high risk of getting damaged at every moment. Flood insurance helps to protect the property owners from water damage to the structure as well as other parts of their property.

The Federal Program

Congress enacted legislation in 1968 that established the National Flood Insurance Program (NFIP). The NFIP has three components: to provide insurance coverage, floodplain management, and flood hazard mapping. Federal flood insurance is only available where local governments have adopted floodplain management regulations for their floodplain areas as set out by NFIP. In fact, more than 20,000 communities across the country participate in the program.

For people in FEMA’s special flood areas, the chances of damage due to flooding are greater than those of fire. If your home is in a community that participates in the program, you may be eligible for getting insurance at a relatively low cost through the federal government. In other words, insurance companies offer flood insurance that’s administered by the federal government.

Waiting Period

Most flood insurance policies require a 30 day waiting period before the coverage starts working. Exceptions include if you’ve purchased a new home and the closing is in less than 30 days.

Where to buy?

Flood insurance coverage can be purchased in a separate policy from the National Flood Insurance Program (NFIP) as well as through most private insurance companies.

Common Myths

One of the common myths about flood insurance is that homeowners’ insurance will cover me the property in case it is damaged or destroyed because of a flood.”
However, it is not true; homeowners’ insurance doesn’t cover flood damage. Federal flood insurance is the only guaranteed coverage available for your home.

The other myth is that you can’t get flood insurance if your house has been flooded before.
The truth is that if your community is participating in the NFIP, it doesn’t matter whether your home has been flooded before or not.