Flood Insurance
The National Flood Insurance Program (NFIP) is a federally subsidized
program authorized by Congress in 1968 to protect property owners
who, up to that time, were unable to secure flood insurance through
the private insurance industry. The program is administered by
the Federal Insurance Administration (FIA), part of the Federal
Emergency Management Agency (FEMA).
Flood coverage is available in communities that have qualified
for participation in the NFIP by agreeing to adopt and enforce
flood plain management ordinances designed to reduce future flood
losses. About 19,700 communities participate in the program nationally,
including 714 in Ohio. There are 56 communities in Ohio (54 municipalities
and unincorporated areas in two counties, Highland and Hardin)
with flood hazard areas not participating.
NFIP statistics for Ohio and US
The NFIP had over 4.3 million policyholders in the US and its
territories, totaling nearly $589 billion in coverage at year-end
2001. Ohio had 33,845 policies in force as of February 28, 2002
for about $3.1 billion of coverage. Based on FIA estimates for
Ohio, there are about 280,000 structures located in mapped flood
plain areas, with a value of $11 billion. Only about 10% of these
structures are protected by flood insurance. FEMA estimates that
about 30% of flood plain structures nationally carry flood insurance.
The US average flood insurance policy purchased as of October
2001 was for $136,025 of coverage, with an average premium of $379.
In October 2000 the average premium was $390 premium for $128,369
of coverage.
Ohio’s overall loss picture from 1978 through December 2001
shows a total of 14,145 losses with payments totaling over $96.7
million. The average cost of a flood insurance policy in Ohio,
based on year-end 2001 figures, is $506. The average coverage per
policy is $93,500. Click here
for the number of flood insurance policies in force by Ohio county as
of February 28, 2002. For state figures, click
here.
Policy availability
After a community qualifies for the NFIP, a flood insurance policy
may be purchased from licensed P/C insurance agents, brokers or
company representatives. 92 insurance companies participate in
the NFIP’s Write Your Own (WYO) program. Through this program,
insurance companies have arrangements with FIA to sell and service
flood insurance policies (including settling claims) under their
own names while the federal government underwrites the coverage.
In 2001, 95% of all NFIP policies were written through WYO companies.
84% of Ohio’s flood policies were written by WYO carriers
as of December 31, 2001.
Coverages available
NFIP coverage is available to all owners and occupants of insurable
property (building and/or contents) in a participating NFIP community.
Flood insurance is available to:
- Home owners for protection of their
structure and contents, and renters for protection of contents
- Builders in the course of construction, condominium associations
and condominium owners
- Condominium associations that can purchase a master policy
to cover both the common areas and their members’ individually
owned units
- Residential condominium unit owners may purchase building and
contents flood insurance to supplement the association’s
policy
- Owners of nonresidential condominium units may purchase contents
coverage
Homes can be insured up to $250,000; furnishings and contents
coverage can be purchased up to $100,000. Commercial property can
be insured up to $500,000 on the building and $500,000 on contents.
All policies carry a deductible, usually $500 or $1,000, with the
deductible applying separately to structure and contents coverages.
There is a 30-day waiting period before new or modified flood
insurance policies go into effect. Exceptions include loan-related
mandates, flood plain map-related revisions and certain renewal
increases. Lenders are required to notify borrowers or lessees
when a property is located in a special flood hazard area that
makes flood insurance mandatory.
2001 flood policy changes
The FIA began issuing revised flood insurance policies on December
31, 2000. Existing policyholders with old dwelling, general property
or residential condominium building association flood insurance
policies are entitled to the extended coverages as well. Copies
and summaries of current flood insurance policy forms are available
on the Web at www.fema.gov/nfip/sfip.htm.
Some of the standard flood insurance policy changes in 2000 included:
- Additional coverage option for property owners: Property
owners with building additions or extensions attached to the
main insured building by a rigid exterior wall, solid load-bearing
wall, stairway, elevated walkway or roof now have the option
of purchasing separate coverage for these additions or extensions.
- Coverage limits raised: Limits of coverage for items
such as fine art and jewelry and for loss prevention efforts
such as sandbagging have been raised.
- Extended contents coverage for condominium owners: Interior
walls, floors and ceilings not covered under the condo association’s
master policy are covered under the residential policy.
- Extended coverage for renters: Coverage has been extended
to include stoves or refrigerators owned by the renter. A 10%
of coverage clause was also added for improvements made by the
renter to the building.
- Coverage limitations added: Coverage for detached carports,
outdoor spas and hot tubs has been eliminated. New coverage limits
apply to mobile homes and travel trailers eligible for replacement
cost coverage.
- Clarifications: Land subsidence and the circumstances
under which flood losses are covered have been redefined.
Facts about cost and coverage
According to the FIA, the number of NFIP policies in force more
than doubled between 1985–2001, from about 2 million to about
4.4 million. The number of flood insurance policies purchased by
Ohioans increased over 53% between 1993 and 2002.
The NFIP estimates that 90% of all natural disasters involve flooding
and between 25–30% of flood insurance claims are for damage
in low risk areas due to the increased severity of storms.
Homeowners/renters insurance policies do not typically cover losses
due to flooding. Flooded vehicles, however, are covered under the
comprehensive portion of an auto insurance policy. Property does
not have to be located in a flood plain to qualify for coverage.
As long as the property is located within an approved NFIP community,
it is eligible for flood insurance.
The cost of a flood policy depends mainly on location. About one
in four policies written are for properties not located in a flood
plain. 1–4 unit residential buildings not located in “special
flood hazard areas” by the NFIP are likely candidates for
a preferred risk policy. These policies cost between $196–$221
a year for $75,000 in structural coverage and $18,000 for contents.
Deductibles apply to each.
Flood insurance protects against damages caused only by surface
flooding and has limited coverage in basements. It does not generally
cover basement sewer backup or sump pump failure; however, there
are certain loss conditions where such coverage may apply. Coverage
for sewer backup is available as an endorsement to most homeowners
policies.
Finished portions of a basement (walls, floors, ceilings and contents)
are not covered under flood insurance. Other exclusions typically
include gas and liquid storage tanks, walks and driveways, motor
vehicles, landscaping, crops and livestock.
Unimproved structural parts such as the foundation, walls, stairways
and utility connections are covered by flood insurance. Other items
usually covered include sump pumps, water tanks, furnaces, water
heaters, heat pumps, washers and dryers, food freezers, air conditioners
and clean-up, as part of the structural coverage.
Types of floods and flood stages in Ohio
Three types of flooding occur in Ohio: general river floods, urban
and small stream, and flash floods. General river flooding occurs
after heavy rainfalls. Since it occurs slowly, residents usually
have advance warning in order to prepare for evacuation if necessary.
Urban and small stream flooding occurs when heavy rain falls in
shorter periods of time. Storm sewers and small streams cannot
handle the runoff, which results in flooded underpasses and basements,
and backed-up sewers.
Flash flooding is always life-threatening because it occurs very
quickly. 2–4 inches of rain in a couple of hours can trigger
a flash flood.
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Between 1978 and year-end 2001, the NFIP
paid over $11.2 billion on 843,608 closed claims.
(Federal Emergency Management Agency) |
Ohio flood events
Ohio experienced severe flooding in eight of the past 10 years.
On July 8, 2001, flash flooding in southwest Ohio killed three.
In the winter of 1996, rainfall and warm temperatures combined
with the melting of several inches of snow and caused flooding
around the state. Record-setting river floods occurred in southern
Ohio in March 1997 due to heavy rainfall. In June 1998 torrential
rains resulted in widespread flash and river flooding, resulting
in 12 deaths. Additional information on Ohio flood events can be
accessed from the Ohio Emergency Management Agency’s Web site
at www.state.oh.us/odps/division/ema/.
Additional flood safety resources
Source: Reprinted from Best’s Review,
November 2000
Source: Federal Emergency Management Agency,
National Flood Insurance Program
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There were 1,037 major disasters declared
since 1972 affecting all 50 states, DC, and 9 US territories.
(Federal Emergency Management Agency) |
Note: In some cases, city/community boundaries
straddle county lines
Source: National Flood Insurance Program, Region
V
 |
Source: Federal Insurance Administration (FIA),
as of 2/28/02 |
|
Between 1990–2001,
there were 53 flood-related deaths in Ohio.
(Federal Emergency Management Agency) |
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