Flood Insurance – What you need to know!
Flood insurance is not covered on a homeowner’s policy. Flood insurance has become a separate entity from homeowners insurance, but here are a few things to help you understand exactly what it is, why it was developed that way, and what you can do.
Flood insurance is not required in all counties, as it is a voluntary process to become part of the National Flood Insurance Program. When a county chooses to participate, it is then geographically mapped to show the Special Flood Hazard areas.
According to the Federal Emergency Management Agency, a Special Flood Hazard Area is defined as, “The SFHA is a high-risk area defined as any land that would be inundated by a flood having a 1-percent chance of occurring in a given year (also referred to as the base flood). The high-risk-area standard constitutes a reasonable compromise between the need for building restrictions to minimize potential loss of life and property and the economic benefits to be derived from floodplain development.
The following excerpts come from the brochure “Answers to Questions about the NFIP,”
1. What is the National Flood Insurance Program (NFIP)?
The NFIP is a Federal program created by Congress to mitigate future flood losses nationwide through sound, community-enforced building and zoning ordinances and to provide access to affordable, federally backed flood insurance protection for property owners. The NFIP is designed to provide an insurance alternative to disaster assistance to meet the escalating costs of repairing damage to buildings and their contents caused by floods. Participation in the NFIP is based on an agreement between local communities and the Federal Government that states that if a community will adopt and enforce a floodplain management ordinance to reduce future flood risks to new construction in Special Flood Hazard Areas (SFHAs), the Federal Government will make flood insurance available within the community as a financial protection against flood losses.
2. Why was the NFIP established by Congress? For decades, the national response to flood disasters was generally limited to constructing flood-control works such as dams, levees, seawalls, and the like, and providing disaster relief to flood victims. This approach, however, did not reduce losses, nor did it discourage unwise development. In some instances, it may have actually encouraged additional development. To compound the problem, due to its high risk and seasonal nature, insurance companies were not able to provide affordable flood insurance coverage. In light of mounting flood losses and escalating costs of disaster relief to the taxpayers, the U.S. Congress created the NFIP. The intent was to reduce future flood damage through community floodplain management ordinances, and provide protection for property owners against potential losses through an insurance mechanism that requires a premium to be paid for the protection.
3. How was the NFIP established and who administers it? The U.S. Congress established the NFIP on August 1, 1968, with the passage of the National Flood Insurance Act (NFIA) of 1968. The NFIP was broadened and modified with the passage of the Flood Disaster Protection Act of 1973 and other legislative measures. It was further modified by the National Flood Insurance Reform Act (NFIRA) of 1994 and the Flood Insurance Reform Act (FIRA) of 2004. The NFIP is administered by the Federal Emergency Management Agency (FEMA), a component of the U.S. Department of Homeland Security (DHS).
How can you tell if your house is in a flood zone? Call your local agent that has access to quote flood for you and they should be able to tell you. We are proud to have several flood specialists within our agency who would be more than happy to assist you with obtaining a quote.
Good News! There are now alternative options for your flood insurance policy!
Did you know that there are now alternative markets, commonly referred to as private markets which you could possibly obtain more affordable coverage through? We have several private flood markets available and would be more than happy to look at for you. If you are interested in a quote, please fill out our online form or give us a call at (325) 695-9999
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"Answers to Questions About the NFIP." Answers to Questions About the NFIP. National Flood Insurance Program, Mar. 2011. Web. 10 Oct. 2016. FEMA F-084