Flood Insurance Tip
Floods are the number one natural hazard in the United States. North Carolina has certainly experienced more than a fair share of flooding over recent years ranging from Hurricane Floyd in 1999 in the east to the western mountains in 2004 from a series of storms. The trend for frequent flooding in our state is highly likely to continue. The potential for uninsured and underinsured property losses are very real concerns for all. Having and maintaining adequate flood insurance is the best response to these concerns.How does one know if flood insurance is needed? First, it is important to understand that homeowners insurance does NOT cover flood damage. Secondly, floods are prone to occur in high-risk flood zones as identified with a beginning letter A or V. If the flood zone begins with a B, C, or X, the property is in a lower-risk area and may be eligible for a preferred risk policy. It is important to note that about 15% of flood insurance claims come from outside high-risk areas. Prior to the loan origination for a first or second mortgage made after 1995, the lender should determine if the dwelling is located in a high-risk flood zone and, if so, require flood insurance accordingly. The borrower may desire a higher limit of coverage than the lender requires and contents coverage should be requested by the borrower since it is not a lender requirement. For property owners who have no mortgage, the decision to purchase flood insurance is a personal choice. Obviously, it would be most prudent to do so, particularly for dwellings located in high-risk flood areas. Renters in high-risk flood areas should consider purchasing flood insurance for contents coverage.
Federally-backed flood insurance is available through the National Flood Insurance Program for properties in participating communities. Participation involves the adoption and enforcement of floodplain management ordinances to reduce future flood damage. Contact the designated floodplain administrator in your community who is responsible for maintaining copies for the Flood Insurance Rate Maps for assistance in determining if a particular property is located in a floodplain.
Since Hurricane Floyd, efforts have been underway to update flood maps statewide. One probable outcome of this partnership initiative will be that more properties are identified to be in high-risk flood areas. Visit the North Carolina Floodplain Mapping Program website at www.ncfloodmaps.com for detailed information on all aspects of the program and progress thus far.
