Make Your Best Offer: TRYING TO MAKE SENSE OF FLOODING AND THE FLOOD PROGRAM © 2013 by Wayne D. Lewis, Sr.

Trying to Make Sense of Flooding and Flood Insurance

National Flood Insurance Program (NFIP)[1]

For the purpose of this discussion, I want to try make sense of the thousands of pieces of information relating to Flooding and the Flood Insurance program otherwise referred to as the National Flood Insurance Program or NFIP. As I sat down to try and put some type of order to this post, I found myself not knowing where to start, let alone finish. So, the first thing I want to do is refer you to the National Flood Insurance Program’s website. It is referenced several times throughout this post, but here it is anyway, so that you can always be able to pull it up at will: http://www.floodsmart.gov/floodsmart/ .

Throughout the blog and the footnotes, I will be referencing various areas of the Floodsmart Program and FEMA, as the two apparently work together to address issues regarding flooding and flood prevention and flood protection here in the United States.

http://www.fema.gov/national-flood-insurance-program-flood-hazard-mapping

Having been the victim of major flooding 2 times in my life (Hurricane Betsy 1965 [2], which predates the current Flood Program, and Hurricane Katrina, 2005 [3]), doesn’t make me an expert. As a matter of fact, each incident and its impact and aftermath presented its own challenges that the NFIP addresses minimally. First of all, here are some general things that we should know or be aware of regarding preparation and response:

Flood Insurance should always be obtained, whether you are in a flood plain or not, whether you are a homeowner or renter, you should have Flood Insurance;
Do not allow your Flood Insurance to lapse, it could be 30 days before the policy kicks in;
What flood plain risk is your home?[4]

High Flood Risk-AE, A, or AO Zone; VE or V Zone
Low or Moderate Flood Risk Zone-Shaded X

If your policy lapses, and your renewal is coincides with a named storm in your region, the policy may not kick in until after the hurricane passes [5]
Keep policies in a place where you will always be able to access them in an emergency;
Have an emergency plan of action in the event a hurricane strikes or threatens.
Keep your emergency supplies available in the event you either have to evacuate or are not able to evacuate to a safe place;
Listen to local public officials and broadcasters regarding the most reasonable action to take to stay safe;
Have a plan of action to address the needs of children who could be separated during an evacuation;
Have a plan of action to address the needs and safety of elderly or special needs family members; [6]
Have a plan of action to address the needs of your pets;
Take pictures of your home and belongings prior to evacuation for insurance purposes;
Do not return to your home after a major water event unless directed to do so by the local authorities;
Do not touch downed power lines or they maybe energized;
Establish a central contact place for all family members in the event of separation;

http://www.floodsmart.gov/floodsmart/pages/preparation_recovery/pr_overview.jsp

There maybe other important things that may pertain to your situation that you should prepare for, you should consult your respective authority for those circumstances.

Protect Yourself[7]

Since standard homeowners insurance doesn't cover flooding, it's important to have protection from the floods associated with hurricanes, tropical storms, heavy rains and other conditions that impact the

U.S.

In 1968, Congress created the National Flood Insurance Program (NFIP) to help provide a means for property owners to financially protect themselves. The NFIP offers flood insurance to homeowners, renters, and business owners if their community participates in the NFIP. Participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding.

http://ks.water.usgs.gov/pubs/fact-sheets/fs.024-00.html

What if your home is flooded? Here are some suggestions, based on what we (my family) have experienced:

Make sure all power is off in your home, do not touch any downed trees or power lines (Contact your power company to advise of down lines in your area (for example: Entergy)[8];
Take pictures immediately of the damage to your home and surrounding areas;
Contact your Insurance provider, or go to the off-site facilities that are often stationed in your neighborhood;
Do not drink water from the faucets unless you are advised to do, which may also include a boil water order from your public works or sewerage and water operator;
Depending on the extent of damage to your home, you may require a structural report to determine if your home is safe for habitation;
If you are injured, contact 911, or locate your nearest Red Cross provider in the area;[9]
Be careful opening refrigerators that have been flooded, possible mold buildup
When safe, open your home’s windows and doors to decrease mold build up
You may want to contact a specialty company to come and treat your home for mold;
Be sure to give insurance companies all of your pertinent information;
You will also need to make contact with FEMA (Federal Emergency Management Agency), as they will require a tremendous amount information regarding damage to your home, loss of food, loss of use of your home, any loss of life, and/or loss of valuables;
With respect to security & safety:

Be aware of contractors who move in quickly to repair your home, who often ask for thousands of dollars up front;
Ask contractors for local references, confirm that they are registered with the sate’s contractor licensing authority ( in Louisiana), it Louisiana Licensing Board for Contractors[10];
Be aware of the length of time your contracts have been in business;
Be aware of any outstanding complaints against your contractor and/or their company[11];
Secure your home properly if you are going to be away for any extended period of time;
If you are going to have new supplies at your home, be sure to secure it inside and check often for vandalism and/or theft-Call 911 if you suspect any criminal activities;
Be careful in revealing any personal information to strangers whom you are not familiar with, or who may have not been referred to you by a reliable source;

Use social media to learn of or to share any activity that maybe going on in your area

http://www.epicdisasters.com/index.php/site/comments/the_deadliest_us_floods/

What is currently going on in the area of Flood Insurance? [12]

Flood insurance for investors and businesses are subject to increases of up to 25% annually
Flood Insurance for primary owners who are outside of protected flood walls are subject to increases in their insurance premiums of up to 25% annually
Maps/Mapping-Flood maps are being evaluated and approved in various communities
Grandfathering will be eliminated of existing policies to new homeowners
A Current flood policy may be transferrable until new laws are in place.
Preferred Risk Policy (PRP)- The Preferred Risk Policy offers multiple coverage combinations for both buildings and contents (or contents-only, for renters) that are located in moderate-to-low risk areas (B, C, and X Zones). Preferred Risk Policies are available for residential or non-residential buildings also located in these zones, and that meet eligibility requirements based on the building’s entire flood loss history. [13]

http://www.noaanews.noaa.gov/stories2008/20080320_springoutlook.html

Flood Facts [14]

Floods and flash floods happen in all 50 states.
Everyone lives in a flood zone. (For more information, visit our Flood Zones FAQs.)
Most homeowners insurance does not cover flood damage.
If you live in a Special Flood Hazard Area (SFHA) or high-risk area and have a Federally backed mortgage, your mortgage lender requires you to have flood insurance. (To find your flood risk, fill out the Flood Risk Profile.)
Just an inch of water can cause costly damage to your property.
Flash floods often bring walls of water 10 to 20 feet high.
A car can easily be carried away by just two feet of floodwater.
Hurricanes, winter storms and snowmelt are common (but often overlooked) causes of flooding.
New land development can increase flood risk, especially if the construction changes natural runoff paths.
Federal disaster assistance is usually a loan that must be paid back with interest. For a $50,000 loan at 4% interest, your monthly payment would be around $240 a month ($2,880 a year) for 30 years. Compare that to a $100,000 flood insurance premium, which is about $400 a year ($33 a month).
If you live in a moderate-to-low risk area and are eligible for the Preferred Risk Policy, your flood insurance premium may be as low as $129 a year, including coverage for your property's contents.
You are eligible to purchase flood insurance as long as your community participates in the National Flood Insurance Program. Check the Community Status Book to see if your community is already an NFIP partner.
Typically, it takes 30 days after purchase for a policy to take effect, so it's important to buy insurance before the floodwaters start to rise.
In a high-risk area, your home is more likely to be damaged by flood than by fire.
Anyone can be financially vulnerable to floods. People outside of high-risk areas file over 20% of NFIP claims and receive one-third of disaster assistance for flooding.
The average annual U.S. flood losses in the past 10 years (2002-2011) were more than $2.9 billion.
When your community participates in the Community Rating System (CRS), you can qualify for an insurance premium discount of up to 45%. Read more about CRS Ratings.
Since 1978, the NFIP has paid over $36.9 billion for flood insurance claims and related costs (as of 12/31/10).
Over 5.5 million people currently hold flood insurance policies in more than 21,000 communities across the U.S.

For more policy and claim statistics, visit the National Flood Insurance Program.

Summary-This information is not considered to be legal advice. You are encouraged to consult with your respective insurance provider, real estate professional, or related provider for those services that may impact you. Information provided here is subject to change and should be verified by those agencies or companies with whom you may have accounts or any professional relationships. Information obtained here while deemed to be from reliable sources, is not guaranteed. You are however, encouraged to consider strongly to obtain flood insurance, even if not required in your respective area. No blog post should be considered as an attempt to solicit the clients or customers of other brokers or agents.

Online bibliography regarding FEMA and Flood Insurance:

Grandfathering Options-

http://www.floodsmart.gov/toolkits/insurance/docs/insurance/Grndfthr_Sht.pdf

http://www.floodsmart.gov/floodsmart/pages/flooding_flood_risks/grandfathering.jsp

Flood Risks

http://www.floodsmart.gov/floodsmart/pages/flooding_flood_risks/levee.jsp