The National Flood Insurance Program is in need of changes to make it a more viable insurance program. Congress has been pushing short term extensions for a year. The current extension is effective through November 30, 2018.
Those who live in flood prone areas are left wondering if the program will lapse, even for a short period. What does this mean to policyholders?
- NFIP policyholders with flood insurance contracts in place will be honored by FEMA and Congress. Should the NFIP’s authorization lapse, FEMA would still have authority to ensure the payment of valid claims with available funds.
- FEMA would not issue new policies or process renewal policies. This means millions of properties across the nation would not be able to bind new or renewal flood coverage.
Importance of always considering Flood Insurance:
FEMA (Federal Emergency Management Association) continues to release information on the importance of flood insurance no matter your risk. Read the interesting facts below or watch this short, informative video Why Do I Need to Rethink Insurance?
FACT: Floods are the nation’s most common and costly natural disaster and cause millions of dollars in damage every year. Floods cost America, on average, $8.2 billion each year (according to 2015 data). Recovering from just one inch of water inside your building can cost about $27,000. Learn about The BIG Cost of Floods.
FACT: Homeowners and renters insurance do not typically cover flood damage.
FACT: Floods can happen anywhere–More than 20 percent of flood claims come from properties outside the high risk flood zone.
FACT: Flood insurance can pay regardless of whether or not there is a Presidential Disaster Declaration.
FACT: Most federal disaster assistance comes in the form of low-interest disaster loans from U.S. Small Business Administration (SBA) and you have to pay them back. FEMA offers disaster grants that don’t need to be paid back, but this amount is often much less than what is needed to recover. A claim against your flood insurance policy could and often does, provide more funds for recovery than those you could qualify for from FEMA or the SBA–and you don’t have to pay the money back.
FACT: You may be required to have flood insurance. Congress has mandated federally regulated or insured lenders to require flood insurance on mortgaged properties that are located in areas at high risk of flooding. But even if your property is not in a high risk flood area, your mortgage lender may still require you to have flood insurance.
If you would like more information on flood insurance or the National Flood Insurance Program, please call us—410.213.5600.