Flood Insurance / Disaster Recovery and Rebuilding
Floods are one of the most common hazards in the United States. Anywhere it rains, it can flood. One of the best ways to protect your home or business from flooding is to have flood insurance. According to the National Flood Insurance Program (NFIP), in high-risk areas, there is at least a one in four chance of flooding during a 30-year mortgage. In moderate-to-low risk areas, the risk of being flooded is reduced, but not completely removed. These areas submit more than 20 percent of NFIP claims and receive one-third of disaster assistance for flooding.
Get the Facts on the National Flood Insurance Program
Since standard homeowners insurance does not cover flooding, it is important to have protection from the floods associated with heavy rains, rapid snow melt, (residual) hurricanes, and other conditions that impact Ohio and the country.
In 1968, Congress created the National Flood Insurance Program (NFIP) to help provide a means for property owners to financially protect themselves. The NFIP allows homeowners, renters and business owners to purchase flood insurance through private property and casualty insurance agents. In order to qualify for flood insurance, the home or business must be in a community that has joined the NFIP and has agreed to enforce sound floodplain management standards.
If you are interested in obtaining flood insurance, visit FloodSmart.gov. At this site, you will be able to find a local agent, learn additional flood facts, assess your flood risk, and find information on filing a claim.
Flood Insurance Facts
- Losses caused by flooding are not covered by homeowners or renters insurance. Coverage is available through a separate flood insurance policy, the National Flood Insurance Program, which is administered by the Department of Homeland Security's Federal Emergency Management Agency (FEMA).
- Flood coverage is available for any building located in a community that has qualified for the NFIP. Buildings do not have to be located in a floodplain to be eligible for flood insurance.
- Most Ohio communities qualify for the NFIP. According to FEMA, approximately 280,000 structures are located in Ohio's mapped floodplain areas with a value of $11 billion. About 10 percent of these structures are protected by flood insurance. Click here to view a list of Ohio communities participating in the National Flood Insurance Program.
- As of November 2014, the average flood insurance premium in Ohio is $898 annually, compared to $707, nationally. The average flood insurance premium for states within FEMA Region V is $905. Region V states: Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin.
- Licensed property/casualty insurance agents or brokers can sell flood insurance. To request an agent referral, contact: 1-888-379-9531.
- Flood damage to vehicles is covered by auto insurance when comprehensive coverage is purchased.
Understanding the Basics
- Typically, there is a 30-day waiting period from date-of-purchase before your flood insurance policy goes into effect. Exceptions:
- If flood insurance is being purchased in connection with the making, increasing, extending or renewing of your loan
- If a building has been newly designed in the Special Flood Hazard Area (SFHA) and flood insurance is being purchased within the 13-month period following a map revision
- If flood insurance is required as a result of a lender determining that a load that does not have flood insurance coverage should be protected by flood insurance
- If an additional amount of insurance is selected as an option on the renewal bill
- Flood insurance protects against damages caused by surface flooding, with limited coverage in basements. It does not usually cover damages from sewer backup or sump pump failure. There may be certain conditions when coverage would apply.
- All policy forms provide coverage for buildings and contents. However, you might want to discuss insuring personal property with your agent, since contents coverage is optional.
- Homes can be insured up to $250,000; furnishings and contents coverage is available up to $100,000. Commercial (business) coverage is available up to $500,000.
- To file a flood insurance claim, contact the insurance agent or company who sold you the policy.
Preferred Risk Policy Eligibility Extension
There is good news for property owners who have been newly mapped into a high-risk flood area since October 1, 2008. The National Flood Insurance Program (NFIP) offers a cost-saving insurance option that may benefit them.
If a structure has been newly mapped into a high-risk flood area on or after Oct. 1, 2008, the property owner may be eligible for significant savings with the NFIP’s Preferred Risk Policy Extension. This extension provides temporary financial relief and additional time to save while FEMA completes its analysis and implementation of premium rate revisions put in place by the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood Insurance Affordability Act of 2014.
Click here for more information about the flood insurance reform.
The National Flood Insurance Program (NFIP) Flood Insurance Manual (Oct. 2013) is used primarily by insurers and agents selling and servicing federal flood insurance. Click here to download the manual.
- To view residential (PRP) flood insurance rates, click here.
- For additional information, contact an insurance agent. Previous and current flood zone documentation for your property will be needed to validate your Preferred Risk Policy extension eligibility.
- click here for Ohio county floodplain map update information.
You can also obtain historic maps and current effective maps through FEMA’s Flood Map Service Center: https://msc.fema.gov/portal.
FloodSmart Preferred Risk Policy Eligibility Extension
NFIP Grandfathering Rules
Disaster Assistance Available
Most forms of federal disaster assistance are available to individuals and businesses only if the president declares a federal disaster for a specified area or areas. Through the Federal Emergency Management Agency (FEMA), the Individuals and Households Program (IHP) provides money and services to people in the disaster area when losses are not covered by insurance and property has been damaged or destroyed. IHP is designed to help people with critical expenses that cannot be covered in other ways.
The following lists assistance available through IHP: Housing Assistance (which includes temporary housing, repair, replacement and semi-permanent or permanent housing construction) and Other Needs Assistance (which includes personal property, transportation, medical, dental and funeral expenses).
IHP is not intended to restore damaged property to its condition before the disaster. IHP may only provide enough money, up to the program limits, to return an item to service. A resident may be required to purchase flood insurance if a dwelling is in a Special Flood Hazard Area.
While some money is available through Individuals and Households Program, most disaster aid from the federal government is in the form of loans from the Small Business Administration (SBA) Disaster Loan Program, which must be repaid. SBA provides low-interest disaster loans to homeowners, renters, businesses of all sizes, and to private, nonprofit organizations.
The State of Ohio Individual Assistance Grant Program (State IA Program) may also be available to flood victims for losses and expenses incurred by individuals and families who do not qualify for the SBA loan program.
Insurance Tips during Rebuilding
Take the following steps to ensure an effective repair:
- If you feel the settlement offered by your insurer is not fair or complete, contact the company and be ready to provide information to support your claim.
- Protect yourself from shoddy workmanship by using licensed, reputable contractors. Be sure they secure the proper building permits. Beware of contractors requiring a large payment up front or whose bids are amazingly low.
- If your home was destroyed beyond repair and you decide to rebuild on another lot or purchase another home instead of rebuilding, check your insurance policy and discuss this with your insurance agent or company representative. There may be limitations on what your insurer will pay for if you do not rebuild on the same property.
- If you choose to build or rebuild, check with your community’s floodplain administrator to learn about your community’s flood safety standards. These standards are required for all new floodplain development or substantially damaged/improved structures in the floodplain and can help avoid having your home and property damaged or destroyed by flood again. In addition, flood insurance premiums are much lower for structures built in compliance with your local flood damage prevention regulations.
- Remember, your settlement will not necessarily be the same as your neighbors’. Your coverage may be different, as well as the level of damage caused by the storm.
- Your insurance policy provides coverage to repair or replace property you had prior to the storm. It will not pay for improvements.
- If you know your home is not up to local building code standards, you may be required to rebuild the damaged sections according to current codes. In some cases, this may mean a design or building material change that may cost more. Generally, a standard homeowner’s insurance policy does not cover such additional expenses. You may want to consider a policy endorsement that pays a specified amount toward such required improvements.
Consider using this checklist before you arrange
for disaster repairs to your home:
- Obtain more than one estimate. Do not be bullied into signing the first contract that is presented to you.
- Obtain all information contained in the bid: costs, work to be completed, repair time, payment schedules, contractor guarantees. Ensure all details are provided.
- Ask for references and be sure to check them out.
- Never sign a contract that is incomplete or blank.
- Do not pay for the repairs or sign a certification of completion until all work has been completed in accordance with the contract specifications.
- Disaster repairs often heighten the opportunity for insurance fraud and abuse. Do not be tempted to conspire in a fraudulent insurance claim. Insurance fraud is a felony.
- Be aware that insurance coverage may be void if policyholder misrepresentation is discovered.
Limitations of the Flood Insurance Policy
- If your home or business is damaged by a flood, you may be required to meet certain building requirements in your community to reduce future flood damage before you repair or rebuild. To assist you in covering the cost of meeting those requirements, the Increased Cost of Compliance (ICC) endorsement has been added to the standard flood insurance policy.
- If you own structures determined by the community to be substantially damaged or repetitively damaged by a flood, you may file an ICC claim. Up to $30,000 may be available to help bring your home or business into compliance with the local floodplain code.
Don't Be Victimized Twice - Avoid Disaster Fraud
After a disaster, you are often confronted with making difficult repair decisions in a short period of time. It is important that you educate yourself to avoid dishonest contractors during these hectic times.
Victims of any recent storm or flooding should be extremely cautious and not let the sense of urgency to repair lead them into making a regrettable decision.
Before hiring contractors, check their references and clear them through a local Better Business Bureau or the Ohio Attorney General’s Consumer Protection Section. For a list of bureaus in Ohio, click here.
For additional information, click on the following links: