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Flood Insurance; What You Need To Know

In the wake of the devastation Hurricane Harvey has caused one thing we can’t stop wondering is how many people affected will be covered by flood insurance? According to data from FEMA, only 17 percent of properties, homes, businesses and apartments/condos, are covered by the National Flood Insurance Program. This is a staggering number of people who will receive little to no benefit from insurance companies when they get back to their homes to rebuild.

Many home and business owners in the Texas Gulf area have been complaining for years that the premiums for flood insurance are too high, even with the subsidies from the federal government. Much of the area around Houston falls outside the most vulnerable zones and aren’t required to buy flood insurance so they’ve opted not to purchase it, what is commonly referred to as self insuring.   

For many of these people the only option is going to be applying for federal disaster relief benefits which come in the form of low interest loans. This will force many people into having and making payments towards two loans for their homes.

Every homeowner’s insurance policy excludes coverage for water damage and / or flooding. If the windows are blown out and cause damage, that will be covered, but many in the Houston area did not experience high winds due to the distance between them and the coast. However, they received the majority of the rainfall, causing the worst flooding Texas has seen in recent history.

So what is flood insurance? The National Flood Insurance Program is run by the Federal Emergency Management System, FEMA, and is the sole distributor of flood insurance coverage. It was established in 1968 and is based on an agreement between local communities and the federal government that established floodplain management to reduce future flood risks to new construction in special flood hazard areas.

What that means is that communities with 'zones' that have a high risk of flooding have / can elect to be included in the program so that the residents of those communities have access to flood insurance. As of April 2010 the program insured about 5.5 million homes, most of which were in Texas and Florida.

Do you need flood insurance? America has 88,633 miles of shoreline, much of it is uninhabitable but many of the areas directly inland are populated heavily and are at just as much risk of flooding as the coastline itself. There are over 250,000 rivers that make up over 3.5 million miles and rivers often create vast floodplains that are in danger if a flood were to occur.

The best way to find out if your home or business at risk is to check the FEMA website for historic data about floods in your area. You can also check your address to see if a flood map has been created for your area. Both tools are very useful when determining the risk you face for flooding.

How can you buy flood insurance? You must apply for flood insurance through an insurance agent or company, you cannot go directly through the National Flood Insurance Program. The average annual premium for flood insurance is $700 which sounds like a lot of money to pay for something that may not end up happening but an average flood causes $2 billion in damages. Most flood insurance policies provide up to $250,000 to rebuild or repair homes and up to $100,000 to replace personal property such as televisions, appliances and furniture.

HD Insurance is located in the Boise River flood plain in Boise, we’re actually less than half a mile from the rivers edge. This spring brought the highest water levels the Boise River had seen since the Lucky Peak Dam was completed in 1915. Some areas in Idaho experienced moderate to major flood damage and many people affected were not covered because it was such a rare event and they assumed they would never need the coverage.

If you have any questions about flood insurance we would be happy to answer them. You can also go to the National Flood Insurance Program’s website to find out more.