Flood Insurance / Disaster Recovery and Rebuilding
Floods are the nation’s most common and most costly natural disaster, and cause millions of dollars in damage every year. 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), more than 20 percent of flood claims come from properties outside the high-risk flood zone.
The National Flood Insurance Program
The National Flood Insurance Program aims to reduce the impact of flooding on private and public structures. It does so by providing affordable insurance to property owners and by encouraging communities to adopt and enforce floodplain management regulations. These efforts help mitigate the effects of flooding on new and improved structures. Overall, the program reduces the socio-economic impact of disasters by promoting the purchase and retention of general risk insurance. Specifically, flood insurance.
If you are interested in obtaining flood insurance, visit FEMA’s NFIP. At this site you can find out how to buy flood insurance, download flood insurance forms, and find additional information on flood insurance and the National Flood Insurance Program
Flood Insurance Facts
- There is typically a 30-day wait period between when you buy a flood insurance policy and when it goes into effect, but there are some exceptions.
- Losses caused by flooding are not typically covered by homeowner or renter insurance. Coverage is available through a separate flood insurance policy, the National Flood Insurance Program, administered by the Federal Emergency Management Agency (FEMA).
- Flood insurance can pay regardless of whether there is a Presidential Disaster Declaration.
- Most federal disaster assistance comes in the form of low-interest disaster loans from U.S. Small Business Administration (SBA), and you have to pay them back. FEMA offers disaster grants that don’t need to be paid back, but the amount is often much less than what is needed to recover. A claim against your flood insurance policy could, and often does, provide more funds for recovery than those you could qualify for through FEMA or the SBA – and you don’t have to pay it back.
- 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 August 31, 2018, the average flood insurance premium in Ohio is $1,035 annually, compared to $694 nationally. The average flood insurance premium for states within FEMA Region V (Illinois, Indiana, Michigan, Minnesota, Ohio and Wisconsin) is $1,011.
- 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.
Preferred Risk Policy for Homeowners & Renters
The National Flood Insurance Program's (NFIP) Preferred Risk Policy (PRP) offers lower-cost protection for homes and apartments in areas of low to moderate flood risk. These areas outside of known floodplains are shown as B, C or X zones on a Flood Insurance Rate Map (FIRM).
Preferred Risk Policy for Homeowners and Renters
- Most homes in moderate and low-risk areas qualify for the NFIP's Preferred Risk Policy (PRP).
- PRPs offer the same quality of coverage as a Standard Flood Insurance Policy and can cover your home and its contents.
- PRPs are available in most communities across the country, wherever flood insurance is available to homeowners and renters.
- The average cost of a PRP is approximately $395 per year. For additional information on PRPs, call 1-800-427-4661 or contact your insurance agent.
Insurance Tips during Rebuilding
Take the following steps to ensure an effective repair:
- If you feel the settlement offered by your insurer is incomplete or unfair, 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 (see additional information/resources, below).
- 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 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.
Increased Cost of Compliance (ICC) Coverage
If a flood damages your property, you may be required by law to bring your home up to community and/or state floodplain management standards. If you have NFIP insurance and your home has been declared substantially damaged by your community, Increased Cost of Compliance (ICC) coverage is provided to cover up to $30,000 of the cost to elevate, flood proof, demolish, or relocate your property.
ICC coverage is in addition to the coverage you receive to repair flood damages. However, the total payout on a policy may not exceed $250,000 for residential buildings and $500,000 for non-residential buildings. Click here for more information.
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.
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 BBBs in Ohio, click here.