Flood insurance

From Wikipedia, the free encyclopedia

Flood insurance denotes the specific insurance coverage against property loss from flooding. To determine risk factors for specific properties, insurers will often refer to topographical maps that denote lowlands and floodplains that are susceptible to flooding.

[edit] Hidden Floods

Nationwide, only 20% of American homes at risk for floods are covered by flood insurance. According to Amanda Ripley, a senior writer at Time, "private insurers largely refuse to offer it because floods are such a sure thing. In certain flood-prone areas, the Federal Government requires people to buy policies from the government's National Flood Insurance program to get a mortgage loan. But the program has never worked even remotely as insurance should. It has never priced people out of living in insanely risky areas. Instead, too few places are included in the must-insure category, and premiums are artificially low." ^[1] The lack of flood insurance can be detrimental to many homeowners who may discover only after the damage has been done that their standard insurance policies do not cover flooding, which can be defined as any excess of water or mud that is normally dry.^[2] This can be brought on by landslides, a hurricane, earthquakes, or other natural disasters that influence flooding, but while a homeowner may, for example, have earthquake coverage, that coverage may not cover floods as a result of earthquakes.

[edit] In the United States

Many insurers in the US do not provide flood insurance in accordance to the risk factors established in some portions of the country. In response to this, the federal government created the controversial National Flood Insurance Program which serves as the insurer of last resort.

The National Association of Insurance Commissioners (NAIC) found that 33 percent of U.S. heads of household still hold the false belief that flood damage is covered by a standard homeowners policy.

If you are eligible, you must purchase a separate flood insurance policy through an insurance company that participates in the National Flood Insurance Program (NFIP). Flood insurance is available for residents of approximately 19,000 communities nationwide.