McB Notes

Flood Insurance

 Up until April of 2007, the topic of Flood Insurance was a rare discussion. However, after the Mother's Day floods of 2006 and then the disaster of April 2007, this has become a hot topic and a frequently requested product.

It is also a mystery to most folks.

Previously, folks felt they only needed flood insurance when the mortgage lender insisted upon it. This would occur when the property was within the mapped flood plain.

Flood risk areas are mapped by the federal government. There are various categories of risk, measured in percentages. So, a 1% risk implies one flood every hundred years, thus the expressions "100 Year Flood Zone" and "100 year storms". The problem is that in 2006 year we had a '100 year flood" and now in April 2007, some areas were hit in the 2/10 % risk areas, or a 500 year flood. There was water damage where there had never been water before.

The Alstead disaster involved homes not in a flood zone that were still swept away because of an upstream dam failure. 

The federal government makes flood insurance available for high risk areas. However, there is one critical caveat. In order for you to apply for such insurance, your community must be an enrolled and participating member in the federal flood protection program. Many communities where the risk is deemed to be very low do NOT participate which means if you live there, you cannot get federal flood insurance assistance.  

The alternative is to use private, (non-government) insurance carriers. This would be for locations mapped outside of the federally designated high risk or flood prone areas.

One other thing: Flood insurance has a 30 day waiting period. That means you may not make a claim on any flood damage that occurs within 30 days of the effective date of the policy. This protects against those who might want to take out the insurance based on a bad weather report, such as an impending hurricane for example.

The only exception to the waiting period rule is if your are buying a home and one of the federal mortgage assistance programs is in play and demands the coverage.   

What should you do?

  • You can check with your town hall to view flood plain maps to see where you sit.
  • Make your own risk assessment - hardly professional, however, it's your risk.
  • Check with your agent to see what's available and what the premium would be. (At McBriarty, we have several Flood Risk carriers.)