US Flood Insurance, USA Flood Insurance, Flood Insurance US, Flood Insurance USA

By: EconomyWatch   Date: 26 May 2010

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US flood insurance ensures compensation against damage of property due to flooding or overflowing water bodies. USA flood insurance policies have been subsidized by the Federal Insurance Administration, although they are marketed by independent agents. A US flood insurance policy is mandatory in the federally designated Special Flood Hazard Areas (SFHA). Insurance companies refer to topographical maps to determine the flood prone areas in order to assess the risk factor.

What does USA Flood Insurance Entail?

In the United States, the total number of claimants is significantly larger than people seeking to protect their property. Due to this, insurance companies find it difficult to make up for the loss on flood insurance. There was a time when most insurers were reluctant to provide US flood insurance in certain areas, especially in coastal regions, which are more susceptible to flooding. This led to the development of several USA flood insurance programs, such as the National Flood Insurance Program.



What is the National Flood Insurance Program?

In 1968, the Congress launched the National Flood Insurance Program (NFIP). The purpose of the NFIP was to observe potential hazard of flooding. The program ensures that the required repair work is done by the designated communities in a timely manner, in order to prevent any serious losses. The NFIP also allows home owners to obtain flood insurance by controlling the coverage plans as well as their prices.

What are the Types of Coverage under US Flood Insurance?

The following are the types of coverage available under a US flood insurance policy:

  • One- to Four-family structure
  • One- to Four-family home contents
  • Other residential structures
  • Other residential contents
  • Business structure
  • Business contents
  • Renter contents


    • Flood facts about the US?

    In the US, the most common natural disaster has always been floods. Some facts about floods in the US include:

  • Flood damage is usually not covered under most homeowner’s insurance.
  • Floods take place in all American states.
  • A property can be devastated even by an inch of water.
  • The major causes of flooding in the US are hurricanes, snow melt and winter storms.
  • Approximately 25 percent of the insurance claims regarding floods are paid for contracts in areas that are less susceptible to flooding.
  • There is a 26 percent possibility of a house getting damaged in a flood, as opposed to a 9 percent chance of fire damage if the property is located in a Special Flood Hazard Area (SFHA) in the duration of a 30-year mortgage.
  • Risk of flooding aggravates due to new land development.
  • The federal government provides assistance to flood-affected people, generally in the form of loans (to be paid back along with interest).
  • As per the Federal Emergency Management Agency (FEMA), around 20,000 communities in the US take measures to control floods.

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