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Flood Insurance Is Needed
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National Flood Insurance Program Needs
To Be Extended





The only way a homeowner can financially protect his property from flood damages is through flood
insurance. Unfortunately this policy has to be purchased separately. It is issued by the National
Flood Insurance Program (NFIP). The Federal Emergency Management Agency (FEMA)
administers NFIP, and the policies are underwitten by over 90 insurance companies.

In 1968 Congress created the NFIP. It offers flood insurance to homeowners, renters and business
owners if their communities participate in the NFIP. This means that the community agrees to
adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of
flooding. There are about 21,000 communities that participate in flood plain management.

Over the past ten years the average flood insurance claim was $48,000. The policy covers the
building as well as the contents. There is usually a 30 day waiting period from the date the
insurance was purchased before the coverage actually starts.  The average premium is $600 per
year.

Flood insurance is mandatory if you live in a high-risk area, and if you have your mortgage with a
Federally regulated or insured lender. To protect you property you have to ask the insurance agent
the right question. Here are a few examples.

>> What flood zone do I live in?

>> Is flood insurance mandatory for my property?

>> What is my property's flood risk?

>> Will the lender require me to get flood insurance?

>> Does my community participate in the Community Rating System?

>> Will my flood insurance policy be backed by the Federal Government?

The National Flood Insurance Program is set to expire September 30, 2011. The National
Association of Realtors and the American Land Title Association are pushing Congress to extend
the program for five years.

In July the House passed HR1309 which would extend the program for five more years. However
the Senate has not yet made a decision.
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