FEMA: More people should buy flood insurance

Wednesday, April 30, 2008

Since heavy rains hit the region March 18, 629 people in Cape Girardeau County have asked the Federal Emergency Management Agency for help to move, repair their homes or to cover other expenses caused by the disaster.

But only 31 flood insurance claims have been filed.

That striking difference has FEMA officials pushing for more people to buy policies through the National Flood Insurance Program because federal flood recovery assistance isn't designed to cover all, or even most, of the costs associated with flood damage.

There are 2,100 buildings in Cape Girardeau County in areas considered to be flood-prone, known in FEMA jargon as special flood hazard areas, said Greg Coulson, a FEMA flood plain management specialist. Of those, 300 are enrolled in the flood insurance program.

Flooding is the most common cause of damage to a home nationwide, Coulson said, more likely than fires or tornadoes. "Over the life of a 30-year mortgage, there is a 26 percent chance of flood damage" to a home in a flood-prone area, Coulson said. "That is a much higher risk than a fire."

Flood insurance is available to anyone, not just people who live in areas considered likely to flood, Coulson said. Nationally, he said, 26 percent of claims came from people who live outside the special flood hazard areas, with one-third of those claims from people whose homes or businesses were in areas considered to have only a low or moderate risk of flooding.

Flood insurance must be in effect for 30 days before flood damage occurs unless the coverage is required as part of a mortgage loan for a building in the flood hazard area. A federal disaster declaration is not necessary to make a claim for flood damage when a building is covered by flood insurance.

There are some restrictions on the size of a policy and who can purchase the insurance:

* Only people who live in communities that participate in the flood insurance program can purchase the coverage. Of 373 communities in the 35 counties where residents are eligible for federal assistance as a result of this year's floods, 103 do not participate, including two that have been suspended for noncompliance and one that withdrew from the program.

* Only structures that meet the building requirements of the local flood plain ordinance or that were built before Dec. 31, 1974, or the date a flood hazard map was issued for a region, whichever is later, are eligible for coverage.

* Residential coverage is capped at $250,000 for a home and $100,000 for contents. Business coverage is limited to $500,000 for a building and $500,000 for contents.

* Buildings suffering damage greater than 50 percent of their value from any cause or being expanded by 50 percent or more must take steps to protect against flooding such as elevating the structure or building barriers to keep water out.

To determine the risk for homes or business, FEMA has issued maps that chart the expected course of high water along creeks and rivers. Those maps are online at the FEMA Web site or at the office of the flood plain administrator in each community.

The costs of flood insurance varies with location, but premiums are the same nationwide for coverage levels with the same risk. For example, a homeowner in preferred risk areas can purchase $100,000 worth of coverage with a $500 deductible on the building and $40,000 coverage for the contents for $233 a year. For homeowners in a high-risk location, coverage that is substantially the same costs $1,079 annually.

For a business a policy that covers $500,000 worth of damage to a building and $500,000 on contents, with a $5,000 deductible, will cost a business owner in a high-risk area like Dutchtown $8,446 annually. For a business owner in a lower-risk area, the cost is $2,300 a year.

Coulson also encouraged people with homes or businesses behind levees or floodwalls to purchase flood insurance. A barrier between a building and high water isn't perfect protection, he said. "What man can make, nature can break."

rkeller@semissourian.com

335-6611, extension 126

On the Net:

Participating communities: www.fema.gov/cis/MO.pdf

Finding agents who sell flood insurance: www.floodsmart.gov

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