"Sometimes people are given wrong information, such as ‘their property isn't eligible for flood insurance' when it is," said Federal Coordinating Officer Mike Moore with the Federal Emergency Management Agency ( FEMA ). FEMA administers the NFIP. "I urge everyone to visit the www.floodsmart.gov Web site or speak with an insurance agent who sells flood insurance to get accurate information about their risk and the insurance policies that are available."
Misconceptions about flood risk and the NFIP fall into several categories, including misinformation about who can buy flood insurance, the need for flood insurance, flood insurance coverage and NFIP itself.
"Flood insurance helps Arkansas residents protect their assets and our state's overall economic health in the event of floods," said State Coordinating Officer Rich Griffin with the Arkansas Department of Emergency Service ( ADEM ). "I urge people to educate themselves about flood risk and flood insurance and make wise choices to protect their family's financial health."
Misconceptions about Who Can Buy Flood Insurance
Misconception: You can't buy flood insurance if you are located in a high risk flood area.
Fact: In Arkansas, you can buy flood insurance through the NFIP no matter where you live, except in non-participating communities...jurisdictions that choose not to follow NFIP guidelines for floodplain management. A listing of 397 participating and 69 non-participating Arkansas communities is also available at www.fema.gov/cis/AR.html.
For property located in a Special Flood Hazard Area ( SFHA ) -- an area with a 1 percent chance of flooding in any year -- lenders must require borrowers to purchase flood insurance as a condition of receiving a federally-backed mortgage loan.
Misconception: You can't buy flood insurance immediately before or during a flood.
Fact: You can purchase flood insurance at any time. There is, however, a 30-day waiting period after you've applied and paid the premium before the policy is effective.
Misconception: Flood insurance is only available for homeowners.
Fact: Flood insurance can provide up to $100,000 of coverage for the contents of any residential building; this includes the contents of a renter's apartment or home.
Misconception: You can't buy flood insurance if your property has been flooded.
Fact: It doesn't matter if your home, apartment, or business has flooded. You are still eligible to purchase flood insurance for property anywhere in Arkansas except in a non-participating community.
Misconception: Homeowners insurance will pay to repair and replace property that is damaged by flooding.
Fact: Unfortunately, many homeowners do not find out until it is too late that their standard homeowners policy excludes any coverage due to rising or standing water damage from flooding.
Misconception: Only residents of high risk flood zones need to insure their property.
Fact: One-third of NFIP insurance claims involve property not located in an area identified as a high risk zone. Even if you live in an area which is not flood-prone, it's advisable to have flood insurance.
Flooding can be caused by snow and ice melt, dam breach, extremely heavy rain fall, new development which decreases ground absorption of water, or a hurricane. The NFIP's Preferred Risk Policy, available for as little as $119 a year, is designed for residential properties located in low-to-moderate flood risk zones.
Misconception: If you live in the "100-year floodplain," that means there is only going to be one big flood every 100 years. You don't really need insurance, since the flood risk is relatively small.
Fact: NFIP now calls areas where flooding is most likely to occur "Special Flood Hazard Areas." Previously, NFIP described these areas as the "100-year floodplain," a term that continues to cause confusion.
The term "100-year floodplain" does not mean there will only be one big flood in 100 years. It means that every single year there is a 1-in-100 chance of a flood. There have been occasions when there have been two severe floods only a few months apart in these areas.
Misconception: Only property located in a "floodplain" needs flood insurance.
Fact: Some 30 percent of flooding insurance claims occurs in areas not readily recognized as being vulnerable to flooding. They are generally not located near a river or other body of water, according to the Floodplain Management Association, a non-profit organization with government and industry members. To assess your property's flood risk, go to www.Floodsmart.gov.
Misconception: Federal disaster assistance will pay for flood damage.
Fact: Before a community is eligible for disaster assistance, it must receive a federal disaster declaration. Declarations occur in less than 50 percent of flooding incidents. Even if federal disaster assistance available, not everyone is eligible; when FEMA assistance available, the amount may be less than needed to complete repairs and replace property.
The annual premium on an NFIP insurance policy will generally be far less expensive than repaying a disaster loan. Furthermore, if you are uninsured and receive federal disaster assistance after a flood, you must purchase flood insurance to be eligible for any future federal disaster aid.
Misconception: The NFIP does not cover flooding resulting from hurricanes, or the overflow of rivers or tidal waters.
Fact: NFIP flood insurance covers many instances of flooding caused by hurricanes as well rivers overflowing or tidal surges. The NFIP defines covered flooding as a general and temporary condition during which the surface of normally dry land is partially or completely inundated. Two adjacent properties or two or more acres must be affected. Covered flooding can be caused by any one of the following:
- overflow of inland or tidal waters
- unusual and rapid accumulation or runoff of surface waters from any source, such as heavy rainfall mudslides or mudflows
- collapse or destabilization of land along the shore of a lake or other body of water, resulting from erosion or the effect of waves, or water currents exceeding normal, cyclical levels.
Misconception: It's impossible to find an insurance agent who sells flood insurance.
Fact: While it is true that not all insurance agents sell flood insurance, many agents do. To find agents who sell flood insurance in any area, look on the www.FloodSmart.gov Web site or call the FloodSmart toll-free phone number, 1-888-379-9531.
Misconception: Flood insurance is too expensive. I can't afford it.
Fact: As with any type of property insurance, the premium depends on the degree of risk for the particular property and the amount of insurance coverage you need. To find out what your premium for flood insurance would be, go to the www.FloodSmart.gov Web site and enter the address of your property.
A closer look at how NFIP provides a solid cushion of financial support during a flooding occurrence that far outweighs any assistance that may be had during a disaster declaration...and NFIP assistance is applicable even without a disaster declaration. Check with your local officials to determine if your community participates under the NFIP guidelines. Remember...your protection against all disasters begins at the local level.
FEMA leads and supports the nation in a risk-based, comprehensive emergency management system of preparedness, protection, response, recovery, and mitigation, to reduce the loss of life and property and protect the nation from all hazards including natural disasters, acts of terrorism, and other man-made disasters.