Am I in a flood zone?

If your answer is “No” you are unfortunately incorrect.

Many home and business owners assume if their lender is not requiring flood insurance then they must not be in a flood zone. This common misconception occurs because property owners confuse the Special Flood Hazard Area (SFHA) (flood zones where coverage is mandated by lending institutions) with the moderate or minimal flood hazard areas (where coverage is generally not required.)

SFHA are commonly referred to the 100-year flood areas, meaning there is a 1% annual chance that a flooding event will occur. Moderate or minimal flood hazard areas are referred to as 500-year flood areas as there is less than a 0.2% annual-chance that a flooding event will occur.

Do you like your odds?

Well the truth of the matter is even if you don’t live in a SFHA you are more likely to experience flood damage than you are to experience fire damage at your home. Floods do not just include an overflow of inland or tidal waters, they also include: mudslides, collapse of land due to a flood, and the unusual and rapid accumulation or runoff of surface water from ANY source.

As many residents of Rhode Island remember from the floods of March 2010, 16 inches of rain devastated many areas that had never experienced flooding in the past. Most of the problems in the greater Providence area were attributed to urban sprawl leaving no place for the rapidly accumulating water to drain. In South County, the full effects of the flooding were not experienced until days after as runoff moved down stream and inundated many people who thought they had already made it through the worst of the storm.

Currently, countless individuals are dealing with the aftermath of hurricanes Harvey and Irma. Many estimates indicate that over 80% of the homes in the greater Houston area did not have a flood insurance policy in-force, leaving most of property owners to deal with the cleanup and restoration expenses out of their own pockets.

But the government will help, right?

To an extent, yes, however the MAXIMUM amount of money available through FEMA’s Mitigation Assistance Grant Program is only $33,000. Realistically, most property owners will only receive a fraction of that amount and dealing with the bureaucracy of a federal agency is something that nobody should have to deal with after experiencing a flooding disaster. Additionally, many people don’t realize that after a grant is accepted you are ineligible to receive FEMA grants for a flooding event at the same property in the future.

Low interest loans are also available through the Small Business Administration (SBA) but these are loans, not grants, and unlike a flood insurance policy the property owner is responsible for repaying any amount borrowed.

The bottom line:

Even if you are not in a designated SFHA, a flood insurance policy is a good investment. If your property is in a moderate or minimal flood hazard area, you qualify for a Preferred Risk Policy (PRP) which can provide building and contents coverage at an affordable rate.

Additionally, recent changes in the National Flood Insurance Program (NFIP) allowed for privet flood insurance providers to enter the market. Some benefits of the private flood marketplace include: lower rates, higher limits, and a shorter waiting period for a policy to go into effect.

Don’t wait for the next storm to start thinking about what your flood exposure is. Contact our office today to find the right policy to cover what is most important to you.