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Check Coverage Now, Warns I.I.I.; 30-day Waiting Period Before Flood ���ϲ����� Takes Effect

INSURANCE INFORMATION INSTITUTE
Contact: Press Offices
New York: 212-346-5500; media@iii.org
Washington, D.C.: 202-833-1580

NEW YORK, March 31, 2009 — Heavy snow combined with an early melt and a deluge of springtime rains could produce historic flooding throughout the nation. Swollen rivers recently threatened communities in places like Fargo, North Dakota and Central Mississippi, both along rivers and lakes, and further inland. Despite such risks, most people still do not buy flood insurance, according to the ���ϲ����� Information Institute (I.I.I.).

A 2008 I.I.I. poll found that only 17 percent of Americans have a flood insurance policy, ranging from 15 percent in the West, to 17 percent in the North Central States and the South, to 20 percent in the Northeast. In the North Dakota and Minnesota communities most threatened by the Red River fewer than 800 homeowners have flood insurance, despite a decade-long push by state and federal officials.

“When it comes to floods and the damage they can do, people are complacent,” said Jeanne M. Salvatore, senior vice president and consumer spokesperson for the I.I.I. “There’s a greater chance of having a flood than there is of a fire, yet most people have insurance protection against fire but not flood. Homeowners, renters and businesses need to purchase both.”

The (FEMA) notes that over 90 percent of all U.S. natural disasters include flooding. Changing weather patterns, increased urban development and the leveling of forests have reduced the land’s natural ability to absorb water. Large-scale erosion and flooding after severe wildfires are common occurrences in mountainous or hilly terrain. Flooding can occur at any time of the year, in any part of the country as a result of any number of disasters. Everyone is at risk.

Standard homeowners and renters insurance does not cover flood damage although it is covered under the comprehensive section of a standard auto insurance policy. Flood coverage, however, is available in the form of a separate policy both from the - NFIP (888-379-9531), and from a few private insurers.

Flood insurance is affordable. The annual premium for a flood policy starts at $119, according to the NFIP, and increases with the level of flood risk and amount of coverage needed. For homeowners, the maximum amount of coverage is $250,000 for the structure of the home, and $100,000 for the contents. For businesses, the maximum amount of coverage is $500,000 for the structure and $500,000 for the contents.

The NFIP policy provides replacement cost coverage for the structure of your home, but only actual cash value coverage for your possessions. Replacement cost coverage pays to rebuild your home as it was before the damage. Actual cash value is replacement cost coverage minus depreciation so that the older your possessions are, the less you will get if they are damaged. There may also be limits on coverage for furniture and other belongings stored in your basement. There is a 30-day waiting period for flood insurance to go into effect so do not wait until flooding in your area is imminent to get the coverage.

For those who want to purchase coverage over and above that offered by the NFIP policy, excess flood insurance is available from private insurance companies. It can even be purchased in high risk flood zones along the coast and close to major rivers as well as in areas of lower risk. Excess flood insurance is available from specialized companies through independent insurance agents or from standard homeowners insurance companies that have arrangements with a specialized insurer to provide coverage to their policyholders.

Keep in mind that before most forms of federal disaster assistance are offered, the president must declare the area a major disaster—and less than 10 percent of all disasters are declared so officially. If your area is declared a disaster, no-interest or low-interest loans are usually made available by the federal government. But these loans are just that, loans, and must be paid back. If you have flood insurance, your claims are paid whether or not the area is formally declared a disaster area.

For more information about insurance, go to the .

For a related video, go to Flood ���ϲ����� for Your Home.

The I.I.I. is a nonprofit, communications organization supported by the insurance industry.