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Mar 20, 2008 11:20 pm US/Central
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Flood Insurance Soaks Up Rising Cost Of Repairs
(WCCO)
According to the Federal Emergency Management Agency, two inches of water in your home can cost $7,800 in replacements and repairs for the average homeowner. A foot and a half bumps that up to almost $27,000.
A little more than 8,600 Minnesotans carry flood insurance through the National Flood Insurance Program (NFIP). That's up by 120 policies since the deadly floods in southeastern Minnesota in August.
Mark Kulda with the Minnesota Insurance Federation said it's common to see a small bump in insurance policies after a major flood. He said following the 1997 Red River floods in Grand Forks, 5 to 10 percent more people bought policies. The increase only lasted about two years.
Kulda said there are misconceptions about who can buy flood insurance -– the biggest one is about flood plains. According to FEMA, who runs NFIP, homeowners do not have to live in a flood plain to buy flood insurance. In fact, those who don't live in flood plains usually pay lower premiums.
Homeowners in high-risk flood zones that receive a mortgage loan from a federally regulated or insured lender are legally bound to have flood insurance.
Congress established the NFIP in 1968 after many insurance companies stopped offering flood coverage. Local communities must submit a plan to and be accepted by the government to be able to offer the flood insurance program to its businesses and residents.
In Minnesota, 83 percent of the communities participate in the program. You can find out if your community participates at
this link.
One of three flood claims comes from someone who does not live in a flood plain. To people considering buying flood insurance, Kulda recommends walking around your home after a heavy rain or serious snow melt to see where the water gathers.
"If it's coming toward your property, you should be scared," he said.
According to FEMA, simply because a flood hasn't occurred in your area doesn't mean it won't happen in the future. Flood risk is based on flood history, rainfall, riverflow data, topography, tidal surge, flood control measures and development. You can find out your flood risk and how much to expect to pay in flood insurance by
clicking here.
There is a 30-day waiting period before the new flood policy goes into effect. There are a few exceptions like when a person changes or renews their loan or when a flood map is revised. You can learn more about those exceptions by
clicking here.
Homeowners in designated high-risk flood zone that receive a mortgage loan from a federally regulated or insured lender are legally bound to require flood insurance.
(© MMVIII, CBS Broadcasting Inc. All Rights Reserved.)