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According to FEMA, flooding causes billions of dollars of property damage
in the United States each year. If you are like many homeowners, however,
you may be unaware that the standard homeowners insurance policy you buy
does not cover flood losses. You may believe that you have a low risk to
this peril but FEMA reports that approximately 33 percent of all flood
claims occur in communities in which flooding is deemed to be a low to
moderate risk. So do you really need a separate flood policy? The
following tips and ideas may prove helpful in answering this question.

* Contact us to see if you live in a community that participates in the
National Flood Insurance Program (NFIP), a prerequisite to qualify for
flood insurance. Participating communities must agree to adopt and enforce
certain floodplain management regulations, including building construction
and zoning laws that minimize the risks of flood damage.

* Ask us to see if you are in a floodplain. Or, if you prefer, go to and select "What's Your Flood Risk?" Enter your home
address and this Web site will tell you whether you are in a low-,
moderate-, or high-risk area.

* Consider purchasing flood insurance even if you are in a low-to
moderate-risk community. In these areas, you may be eligible for the
Preferred Risk Policy, with premiums as low as $112 per year including
coverage for your personal property.

* Note that a flood policy does not take effect until 30 days after you
purchase the coverage. Thus, trying to purchase coverage after the local
meteorologist announces a flood alert for your community won't work.

* The maximum limit of insurance in the NFIP for your home itself is
$250,000. If your residence's value exceeds this amount, ask us about
excess insurance for losses above the federal policy's maximum limits.
This insurance may be available from private insurers.

* Don't assume that the government will bail you out if you suffer a flood
loss and don't have a flood insurance policy. That decision is a gamble
you may not win. Remember that federal disaster assistance, if available,
is usually a loan that must be paid back with interest.

* Discuss all the pros and cons of flood insurance with us before making
your final decision.

This article is brought to you by Peter Tuttle, CPA.  You may contact me by sending an e-mail via the link to the right of my active rain blog page.  Please visit my website at

"I help individuals, families, small-businesses & non-profits with their income tax & insurance needs."

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Comments (1)

Keith Goodman
Keith Goodman - Merced, CA
Very good post. Many people in our area have not seen the value of Flood Insurance. A couple years ago we had some flooding and people wish they had flood insurance
Mar 19, 2008 05:14 AM