What turns a flood into a disaster?
Neighborhoods of homeowners with no flood insurance, said David Colmans, the executive director of the Georgia Insurance Information Service, an Atlanta-based clearinghouse on insurance information for consumers.
"It is sad that people don't get the seriousness of flooding," Mr. Colmans said.
Take the September flooding in Atlanta, for example. It was a "major disaster mostly because people didn't have flood insurance coverage," he said.
A homeowner's or renter's insurance policy does not cover damage caused by a flood. That takes a special policy and additional cost.
Mr. Colmans said he spends a lot of time trying to dispel myths about flood insurance, one being that it is needed only if the home is in a flood zone. Between 25 percent and 35 percent of flooding in the U.S. occurs outside designated flood plains, he said.
"People don't get the issue. Because they don't live in a flood plain and the mortgager tells them they don't have to have it," they don't get the flood insurance, he said.
"And then look what happens, you get these big floods. And then they have to pray for a FEMA loan," Mr. Colmans said.
The only property owners required to buy flood insurance are those who have federally backed mortgages on property that lies within the official flood hazard area.
All flood insurance is backed by the National Flood Insurance Program. All insurance companies that write flood policies use a write-your-own policy through the Federal Emergency Management Agency, which administers the program, he explained.
The program's Web site, www.floodsmart.gov, has a risk-assessment tool: Just enter the address, and the risk level for flood damage will be reported. Risk levels can be higher for people who live near streams even though they aren't in official flood zones.
"It is good to know your risk," Mr. Colmans said. "It is something to make a decision other than 'I'm not in a flood zone.' "
The National Flood Insurance Program made policy revisions Oct. 1 that resulted in higher deductibles and an average 8 percent increase in premiums, said Allison Dean Love, the executive director of the South Carolina Insurance News Service.
The average cost of a flood insurance policy is $540 a year. The cost is based on the flood risk and the value of the home.
Homeowners can buy up to $250,000 of coverage for the structure and up to $100,000 for personal contents. Businesses can buy up to $500,000 in coverage for the structure and $500,000 in contents coverage, Ms. Love said.
Reach Tim Rausch at (706) 823-3352 or firstname.lastname@example.org.
FACTS ON FLOODING AND FLOOD INSURANCE
- Floods and flash floods happen in all 50 states.
- Flash floods often bring walls of water 10 to 20 feet high.
- The average annual U.S. flood losses in the past 10 years were more than $2.4 billion.
- Everyone lives in a flood zone, regardless of what insurance maps say.
- Most homeowners insurance does not cover flood damage.
- If you live in a special flood hazard area or high-risk area and have a federally backed mortgage, your mortgage lender requires you to have flood insurance.
- Just an inch of water can cause costly damage.
- A car can easily be carried away by just two feet of floodwater.
- 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 percent interest, your monthly payment would be around $240 a month ($2,880 a year) for 30 years. Compare that with a $100,000 flood insurance premium, which is about $400 a year ($33 a month).
- If you live in a low-to-moderate risk area and are eligible for the preferred risk policy, your flood insurance premium might be as low as $119 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.
- It takes 30 days after purchase for a policy to take effect.
- Your home has a 26 percent chance of being damaged by a flood during the course of a 30-year mortgage, compared with a 9 percent chance of fire.
- Last year, one-third of all claims paid by the NFIP were for policies in low-risk communities
. Source: Columbia County Emergency Management Office
HOW MUCH IS IT?
For a preferred risk policy in a moderate-to-low risk area:
- $260 annual premium covers contents and a building with a basement up to $100,000
- $388 annual premium covers contents and a building with a basement up to $250,000
For a standard policy in a high-risk area:
- $1,068 annual premium covers contents and a building up to $100,000
- $2,647 annual premium covers contents and a building up to $250,000
ASSESS YOUR FLOOD RISK at www.floodsmart.gov.
|Photos: Flood of 1990|
|Click on images for more photos|