Most homeowners, renters and condo insurance policies do not cover flooding. Like all weather related phenomena, flooding can be unpredictable to some degree, but, you can protect yourself by having the right insurance coverage in place. Let’s talk some basic flood insurance information to better understand the process of determining how at risk you are for flooding.
A “flood” is defined as a general and temporary condition where two or more acres of normally dry land or two or more properties are inundated by water or mud-flow.
The flood risk for any property is determined by many factors such as flooding history, rainfall, tidal-surge date, river flow, and many more factors.
Each community is assigned a Flood Insurance Rate Map (FIRMs) based onthis information and these measure your degree flood risk. These are broken into high-risk, moderate- to- low risk, and undetermined- risk areas. High-risk areas have a 1 in 4 chance of flooding. These are indicated on flood maps as an ‘A’ or ‘V’ zone. Moderate-to-low areas are indicated as ‘B’, ‘C’ or ‘X’ zones. These areas receive one-third of the disaster assistance for flooding. Undetermined-risk areas are indicated by a ‘D’ zone. No analysis of this risk has been conducted, but there is still a risk of flood.
Do you know which Zone your property is in?
Recently, the NFIP (National Flood Insurance Program) has implemented a major overhaul in the Flood Insurance Program. The name of the new program revision is called the “Biggert-Waters Reform Act of 2012”, and changes to the program have already begun. Under this new program, FEMA is updating flood hazard maps across the country. With the new maps, your risk may change, and you may be required by your mortgage company to purchase insurance, whereas before you weren’t required to. The NFIP has implemented some relief strongholds to ease into the rate increases if certain individuals were re-mapped into a high-risk area. In addition to flood map changes, the NFIP is:
- phasing out subsidized rates in Pre-Firm Zones ( ‘A’ & ‘V’)
- adding a 5% Reserve Fund Assessment to flood insurance policies
- phasing out grandfathered rates( risks that have been re-mapped previously)
- implementing gradual rate increase over the next 5 years
I encourage everyone to determine your risk of flooding and obtain a quote for flood insurance.
Having seen the effects of flooding first hand, without the coverage it is almost impossible to recover.