![]() The average annual premium for an NFIP policy is about $700, which is less than the annual interest on most low-interest disaster loans. The main form of federal assistance after a federally declared disaster is a loan that must be repaid with interest. ![]() This happens in less than 50 percent of flooding incidents. MYTH: Federal disaster assistance will pay for flood damage.įACT: Before a community is eligible for federal disaster assistance, it must be designated a federal disaster area. The policy does not cover the contents of a finished basement or improvements such as finished walls, floors and ceilings. Basement coverage under an NFIP policy includes cleanup expenses and items used to service the building such as elevators, furnaces, hot water heaters, washers and dryers, air conditioners, freezers, utility connections, circuit breaker boxes, pumps, and tanks used in solar energy systems. The NFIP defines a basement as any area of a building with a floor that is below the ground level on all sides. MYTH: The NFIP does not offer any type of basement coverage.įACT: Yes, it does. The NFIP’s preferred risk policies are designed for residential properties located in low- to moderate-risk flood zones. People outside of high-risk areas file more than 25 percent of NFIP claims and receive one-third of disaster assistance for flooding. Anyone can be financially vulnerable to floods. MYTH: Only residents of high-risk flood zones need to insure their property.įACT: Even if you live in an area that is not flood-prone, it’s advisable to have flood insurance. You are still eligible to purchase flood insurance provided your community participates in the NFIP. MYTH: You can’t buy flood insurance if your property has been flooded.įACT: It doesn’t matter how many times your home, apartment or business has been flooded. Commercial structures can be insured to a limit of $500,000 for the building and $500,000 for the contents. The limit for contents coverage on all residential buildings is $100,000, which is also available to renters. ![]() A maximum of $250,000 of building coverage is available for single-family residential buildings $250,000 per unit for multi-family residences. MYTH: Flood insurance is available only for homeowners.įACT: Flood insurance is available to protect homes, condominiums, apartments and non-residential buildings, including commercial structures. MYTH: Homeowners’ insurance policies cover flooding.įACT: Unfortunately, many homeowners do not find out until it is too late that their homeowner’s policy does not cover flooding. In addition, the amount of insurance coverage cannot be increased during a loss in progress. The policy does not cover a “loss in progress” defined by the NFIP as a loss occurring as of 12:01 a.m. 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.In those cases, there is no waiting period. If the initial purchase of flood insurance is in connection with the making, increasing, extending or renewing of a loan.There is a 30-day waiting period after you’ve paid the premium before the policy is effective, with the following exceptions: MYTH: You can’t buy flood insurance immediately before or during a flood.įACT: You can purchase flood coverage at any time. Under the National Flood Insurance Act, lenders must require borrowers whose property is within an SFHA to purchase flood insurance as a condition of receiving a federally backed loan.įlood insurance on homes and businesses located above or outside a floodplain is very affordable insurance for homes in SFHAs may cost substantially more. 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), also known as the 100-year floodplain, or the regulatory floodplain. MYTH: You can’t buy flood insurance if you are located in a high-risk flood area.įACT: You can buy federal flood insurance no matter where you live if your community participates in the NFIP. Here are some of the most common myths and facts about flood insurance and the NFIP. Yet, many property owners often have misconceptions about flood insurance, such as whether they can get it, when they can buy it, and how much it costs, etc. ![]() ![]() Property owners who live in communities participating in the National Flood Insurance Program (NFIP) can purchase affordable protection to insure against flood losses. Floods are the most common and costly natural disasters in the United States. ![]()
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