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Congress created the National Flood Insurance Program (NFIP) in response to the rising cost of taxpayer-funded disaster relief for flood victims and the increasing amount of damage caused by floods. The NFIP makes federally backed flood insurance available in communities that agree to adopt and enforce floodplain management ordinances to reduce further flood damage.
One way to determine if you property is located in a floodplain is by viewing the Flood Control District's 100-year FEMA floodplain maps. You can also determine the relative flood risk for your property (one way flood insurance rates are determined) at the FEMA Web site.
The National Flood Insurance Program's Community Rating System rewards community floodplain management programs that exceed program standards with flood insurance premium discounts for that community. The District has participated in this program since 1991. Through the annual accreditation process, the District is now at Class 4, which gives residents of unincorporated Maricopa County a 30 percent discount on their flood insurance. Fewer than 10 percent of floodplain management agencies are Class 5 or better.
Buying Flood Insurance
To buy a flood insurance policy, call your insurance agent or contact one of the "Write Your Own" companies, which are private insurance companies that write flood insurance under special arrangement with the Federal government. If your agent does not write flood insurance or you don't have an agent, you may call the National Flood Insurance Program toll-free at (888) FLOOD-29 to obtain the name of an agent in your area.
It's a good idea to have the same agent who writes your homeowner's or other insurance policies also write your flood insurance policy so that in the event you need to file a claim, you only have to work with one insurance agency.
You can pay for your flood insurance in similar ways to paying other insurance. In addition, you may also pay premiums through an escrow account established by your mortgage lender, as you do for other types of insurance or taxes.
Facts about Flood Insurance
- There are times when you are required to purchase flood insurance.
- If you buy a house in a designated high-risk area and receive a mortgage loan from a federally regulated lender, your lender must require that you buy flood insurance.
- If a high-risk area is determined after you buy a house and you receive a mortgage loan from a federally regulated lender, your lender must require that you buy flood insurance.
- If refinancing or borrowing money to build, repair, reconstruct or improve a structure in a flood hazard area, your lender must require that you buy flood insurance.
- Flood damage is not covered by homeowner's policies.
- You can protect your home, business and belongings with flood insurance from the National Flood Insurance Program.
- You can insure your single-family home with flood insurance for up to $250,000 for the building and $100,000 for the contents.
- You can buy flood insurance no matter what your flood risk.
- It doesn't matter whether your risk is high, medium or low. You can buy flood insurance as long as your community participates in the National Flood Insurance Program.
- It's a good idea to buy even in low- or moderate-risk areas: Almost 25 percent of all flood insurance claims come from low-to-moderate risk areas.
- There is a low-cost policy for property in low-to-moderate risk areas.
- The Preferred Risk Policy is available at a reduced premium if your property meets certain requirements.
- Flood insurance is affordable.
- The average flood insurance policy costs a little more than $400 per year.
- In comparison, a disaster home loan can cost you more than $300 per month for $50,000 over 20 years.
- Flood insurance is easy to get.
- You can buy NFIP flood insurance from private insurance companies and agents.
- Contents coverage is separate, so renters can insure their belongings, too.
- Up to $100,000 of contents coverage is available for homeowners and renters.
- Whether you rent or own your home or business, make sure to ask your insurance agent about contents coverage. It is not automatically included with building coverage.
- Up to a total of $1 million of flood insurance coverage is available for non-residential buildings and contents.
- Up to $500,000 of coverage is available for non-residential buildings.
- Up to $500,000 of coverage is available for the contents of non-residential buildings.
- There is usually a 30-day waiting period before the coverage goes into effect.
- Plan ahead so you're not caught without flood insurance when a flood threatens your home or business
- Federal disaster assistance is not the answer.
- Federal disaster assistance is only available if the president declares a community a federal disaster area.
- Federal disaster assistance declarations are issued in less than 50 percent of flooding events.
- Flood insurance pays even if a disaster is not declared.
- You can buy flood insurance immediately before or during a flood.
- You can purchase flood insurance at any time.
- There is a 30-day waiting period after you've applied and paid your premium.
- There is a one-day waiting period if the initial purchase of flood insurance is made during the 13 months following a revised flood mapping for a community.
- The policy does not cover a "loss in progress."
- You can buy flood insurance if your property has been flooded.
- You are still eligible after your home, apartment or business has been flooded
- The NFIP does offer basement coverage.
- The NFIP defines a basement as any area of a building with a floor that is below ground level on all sides.
- Flood insurance covers structural elements, essential equipment and other basic items normally located in a basement, such as clothes washers/dryers and food freezers.
- Flood insurance does not cover basement improvements including finished walls, floors or ceilings, or personal belongings kept in the basement.
- It makes a difference when your house was built.
- Buildings that were constructed prior to the date of the community's first Flood Insurance Rate Map (FIRM) pay an insurance premium based on chargeable rates that are subsidized by tax dollars.
- Buildings that were built or substantially improved after the issuance of a FIRM are charged actuarially sound insurance rates that fully reflect the building's risk of flooding.
Additional answers to flood insurance questions are provided at the National Flood Insurance Program Web site.
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