Flood insurance is sold by insurance agents and run by NFIP (National Flood Insurance Program) which is part of FEMA (Federal Emergency Management Agency). This program is a federal program and it needs to be funded by congress every year.
In light of Hurricane Katrina, almost all property owners are aware of the fact that Homeowners, Condo and Renters policies do not cover damage caused by flooding. We are also aware of the fact that flooding does not necessarily occur only in areas where flood insurance is required. Also a flood does not care if you have ever flooded before.
Just look at the number of homes in Lakeview and old Metairie that had flood damage. Many of these were in preferred zones, (B, C or X) never flooded before and the Mortgage companies did not require the owner to carry flood insurance. I realize the damage had a lot to do with failed levees but keep in mind Katrina went east and was a CAT 3 when it made land fall. There is always the threat for a stronger storm that is more direct. To say I would not have flooded if the levees held this is true. However it is a moot point. You also would not have flooded if you lived in Baton Rouge. The facts are levees and pumps will fail and community leaders will make bad decisions. Levees and pumps are put in place to provide a certain level of protection they are not guarantees. If you live in an area that is below sea level get used to the concept that you may flood some time and levees may breach. Knowing this information is good because it allows you to take precautions and make sound decisions. Some things to consider:
Build or buy homes that are above base flood level. I live in a raised basement uptown. I had five and a half feet in the first floor. The first floor was mostly, bikes, tools, storage, pool table an old couch. My living area was untouched except for the contents of the refrigerator.
Purchase flood insurance. If you are in a preferred zone X, C, or B buy $250,000.00 for the building and $100,000.00 for contents. It is the cheapest insurance you will ever purchase $368.00 per year. If you do not live in these zones you are need to have flood insurance.
Flood insurance is transferrable. If you sell your home or buy a home you can have the current policy transferred to your name.
Elevation Certificates are required flood insurance for all structures that are not in a preferred zone (zones C, B or X).
Flood insurance only covers one building. So if you have a detached garage, pool house or other structure you will need a separate policy and a separate elevation certificate.
Flood insurance pays depreciated value on contents.
If you need more than $250,000.00 to cover your property you will need to purchase excess flood insurance. This however is not readily available and may require some research to find out who sells excess flood insurance.
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