National Flood Insurance Program
FINANCIAL PREPARATION FOR A FLOOD
The National Flood Insurance Program (NFIP) was established with the passage of the National Flood Incsurace Act of 1968. The NFIP is a Federal program enaabling property owner in particiipating communities to purchase flood insurace as protection against flood lossed; in exchange, State and local governments agree to adopt and enforce floodplain management ordinances that reduce future flood damages. Over 20,300 communites participate in the NFIP.
FINANCIAL PROTECTION AGAINST FLOOD LOSS
Floods are the most common and costly natural disaster in the United States. Fortunately, property owners who live in communities participating in the NFIP can purchase affordable protection to insure against flood losses. Since 1969, the NFIP has paid over $30 Billion dollars in flood insurance claims that have helped hundreds of thousands of families and businesses recover from flood events.
To participate in the NFIP, a community must adopt and enforce flood plain management ordinances that meet or exceed the minimun requirements of the program. These requirements are intended to prevent loss of life and property and reduce taxpayer cost for disaster relif, as well as minimize economic and social hardships that result from flooding. The specific requirements that a community must adop depend on the level of risk identified by the community.
The NFIP has an arrangement with private insurace companies to sell and service food insurace policies. For a list of private insurace compaines that sell and service NFIP flood insurace policies, vist http://www.fema.gov/nfipInsurance/compaines.jsp.
WHO IS ELIGIBLE
Most people who live in NFIP participating communities, including business owners. Renter and condo unit owners, are eligible to purchase federally-backed flood insurance. A residential buliding can be insuredj up to $250,000 and it contents up to $100,000 , and a non-residential property owners can insure their bulidings up to $500,000 and contents up to $500,000.
Flood Insurance Requirements
Resident who live in High-Risk area (referred to as Special Flood Hazards Areas[SFHAs]) are required to purchase flood insurace if they have a mortgage form a Federal regulated lender. They also must carry the insurace for the life of the mortgage. Residents with a mortgage on a buliding outside high-risk areas can also purchase flood insurance flood insurance and may be eligible for Preferred Risk Policies.
In general, a policy does not take effect until 30 days after the purchase of flood insurance. However, if a policy is purchased in connection with a mortgage or at a set time peroid following the revision or update of a Flood Insurance Rate Map (FIRM) , the waiting peroid does not apply.
What is and is not covered by Flood Insurance
Physical damage to a buliding or personal property that is directly caused by a flood is generally covered by flood insurace. For example, damages caused by a sewer backup are covered if the backup is a direct result of flooding. However, if the backup is caused by some other problem, the damages are not covered.
To Find out more vist: http://www.floodsmart.gov
To Find out how to protect yourself in an Flood Situtation visit this link to learn about Flood Awareness http://www.floodsafety.noaa.gov/