Flood Insurance

The basics on flood insurance

If you are interested in obtaining flood insurance, but your community does not participate in the National Flood Insurance Program, you’re surely wondering what you’re supposed to do. Any community that does not participate in the National Flood Insurance Program are subject to the regulations outlined in Section 202(a) of the Flood Disaster Protection Act of 1973.

This section of the Flood Disaster Protection Act of 1973 provides that flood insurance, Federal disaster assistance, Federal grants and loans, and any type of Federal mortgage insurance unavailable for any home or business located in the floodplain that is outlined in the National Flood Insurance Program map.

My home is located on the floodplain, but we had the “100-year flood” and it wasn’t flooded. Do I really need flood insurance?

This is a common question of many home and business owners located on the floodplain and remained standing after the “100-year flood.” Let’s start first with the misconception of what a “100-year flood” really is. Opposed to what the name would imply, the “100-year flood” is not actually a flood that occurs every 100 years. Rather, the phrase actually refers to the probability that used to describe how one flood will compare to other that may occur.

The phrase is also rather dated, and has now been replace with “1% annual chance flood.” This simply means there is a one percent chance of flood of that size will occur in any given year. So basically, over 100 years, it has a 63 5% of happening. If that doesn’t surprise you, think about the realistic vision for a moment. If you have a 30-year home mortgage, the chances of your home being flooded are around 25 percent. You’re probably thinking, well that isn’t too bad.

But, did you know that following that theory, a home on a floodplain is nearly five times more likely to be damaged by flood, than to have suffer a major fire!