Flood Insurance Myths

Because of the widespread flooding during Hurricane Ike, more people are buying Federal Flood Insurance. However, many people still aren't buying this coverage because they don't understand how the flood insurance program works, or can't afford it. Jim Bell reports.

Many people never think about flood insurance until they learn, to their horror, that homeowners insurance covers wind-driven water only. It does not cover rising water. That's one of the myths about flood insurance; others: some people think you can't get flood insurance if you live in a high risk area, or, that they don't need flood insurance if they don't live in a high risk area. FEMA insurance specialist Gloria Prince says floods can happen anywhere, and anyone can buy flood insurance, no matter where they live.

"We really encourage people who do not live in special flood hazard areas to buy flood insurance, because, I would say nature doesn't respect maps. And we do know that about 30 percent of the claims that we pay annually are to people who are not in special flood hazard areas." 

Prince says the beauty of flood insurance is that it covers any kind of rising water event, large and small, any time of year, 24-7.  Not just big floods during hurricane season. If your street floods in a heavy spring rain and rising water gets into your house, you're covered. If your lawn sprinkler goes berserk and floods your yard, and water gets into the house, you're covered.  It doesn't take a federal disaster declaration. Speaking of which, Prince says another myth is that a disaster declaration will provide enough disaster assistance to help people recover.

"Disaster assistance is designed to get people on the road to recovery, but it's not going to come anywhere near helping people get back. And the other thing that you need to keep in the back of your mind is, that disaster assistance is only available when the President has signed a Declaration of Disaster. So many floods are never declared disasters, and disaster assistance isn't available.  So the only way people will recover is through having insurance."

The cost of flood insurance is a problem for many people. It's expensive in high risk areas. People in Galveston, for example, pay more than a thousand dollars a year, and it has to be paid in full, up front.  There's no payment plan.  FEMA spokesman Clyde Hoffmeyer says that's nothing compared to the cost of uninsured flood damage, and he urges people in those high risk areas to find some way to pay for it.

"Unfortunately there is no premium finance capability with the NFIP. The best thing that I could suggest would be, if they're able, to borrow the money at the bank or do whatever to pay it all up front."

Even though you can buy flood insurance at any time, it takes 30 days for it to go into effect.

Jim Bell, KUHF, Houston Public Radio News.

For more information on the National Flood Insurance Program, visit www-dot-floodsmart-dot-gov.