Flooding causes more than 90 percent of all disaster-related property damage in the United States but most homeowner policies do not cover flood damage. Because of this, homeowners need flood insurance -- a special policy backed by the federal government, with cooperation from local communities and private insurance companies.
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About 200 insurance companies, possibly including the company that already handles your homeowners insurance, write and service flood insurance policies for the government, which finances the program through premiums. Although flood insurance is relatively inexpensive, most Americans neglect to purchase protection.
National Flood Insurance Program Only about one-quarter of the homes in areas most vulnerable are insured against flood loss, according to the Federal Insurance Administration (FIA). In those areas, flooding is 26 times more likely to occur than a fire during the course of a typical 30-year mortgage. More than 19,000 communities have agreed to stricter zoning and building measures to control floods, according to the Federal Emergency Management Agency (FEMA). Residents in these communities are entitled to purchase flood insurance through the National Flood Insurance Program (NFIP), a program FEMA oversees.
30-day Waiting Period An important fact to know is that a flood insurance policy does not take effect until 30 days after you purchase it. So, if the weather forecast announces a flood alert for your area and you run to purchase coverage, it's already too late. You will not be insured if you buy a policy a few days before a flood. To see if your community participates in NFIP and for more information about federal flood insurance, visit www.fema.gov/nfip.
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