Flood Insurance Basics
Why Flood Insurance from Bankers?
Bankers was among the very first companies admitted into the National Flood Insurance Program in 1984. We became the nation's largest flood insurance carrier serving independent agents. We reentered the flood business in 2008, and our commitment to service is as strong as ever.
That vast experience translates to claim service and customer support second to none.
Will my Homeowners policy cover flood damage?
A Homeowners policy may cover fire, tornado or even earthquake damage. But seldom does it cover damage from flooding - nature’s most common natural disaster.
What causes flooding?
Flooding isn’t just a threat to people living near water. It happens all across the country — in all regions, in all climates, in a variety of ways. Take a look at some of the causes of flooding:
- Storm Surge
Storm surge is a large dome of water, often 50 or more miles wide, that sweeps across the coastline near where a storm makes landfall. Storm surge is the greatest threat to property and life along the affected coast.
- Flash Flooding
Intense rainfall in a brief period leaves more water than the ground can absorb. When this happens, flash flooding can occur. Flash floods occur with little or no warning, move at very fast speeds and can reach a peak in a few minutes. They can roll rocks and boulders, tear out trees and destroy buildings and bridges.
Mudflow results from long, heavy rains on hillsides and mountainsides. The water saturates the soil and acts like a lubricant, causing soil, large rocks, boulders and homes to slip free.
This type of flooding comes when higher-than-normal spring temperatures cause snow to melt rapidly. The excess water is too much for the frozen ground to absorb.
- Ice Jams
On frozen rivers, melting snow and heavy rain break the ice into large chunks. These chunks float downstream, often piling up at bridges, dams and narrow passages. These ice jams can force water to overflow riverbanks, flooding nearby homes and businesses.
Nature isn’t the only cause of flooding.
New construction and paving alter land’s ability to drain properly. As a result, run-off can increase two to six times over what would occur on natural terrain. Areas that were initially zoned as low risk can quickly become high risk as urban development alters topography.
The National Flood Insurance Program (NFIP) legally defines a flood as follows:
Under the National Flood Insurance Program (NFIP) a flood is defined as a general and temporary condition of partial or complete inundation of normally dry land by:
- The overflow of inland or tidal waters.
- The unusual and rapid accumulation or runoff of surface waters from any source.
- Mudflows which are proximately caused by flooding, as defined above and are akin to a river of liquid and flowing mud on the surfaces of normally dry land areas, including your premises, as when earth is carried by a current of water and deposited along the path of the current.
- The collapse or subsidence of land along the shore of a lake or other body of water as a result of erosion or undermining caused by waves or currents of water exceeding the cyclical levels which result in flood as defined above.
To qualify as a general and temporary condition, the flood must affect either two or more adjacent properties or two or more acres of land and have a distinct beginning point and ending point. Also, to qualify, the flood waters can only be surface water that covers land that is normally dry.
Who gets government aid?
Government aid is available only if the President makes an official disaster declaration (less than half of all flooding qualifies). Most often, federal disaster aid comes in the form of an interest-bearing loan. When grants are awarded, the average amount is less than $2,500. Less than half of flooding events are declared disasters, and insurance is often the sole source of assistance for victims.
What are my chances of flooding?
Live in a high-risk area? You have a 25% chance of flooding during the life of your 30-year mortgage. You’re also more likely to experience flooding than fire – there is a 9% chance you’ll experience a fire.
You don’t have to live in a high-risk zone to be a victim. Almost 25% of all Flood claims come from low to moderate-risk areas.
Is flooding really a serious problem?
The odds may seem like a million to one you’ll ever experience serious flooding. But it happens more than you’d think. In fact, 90% of all presidentially-declared disasters involve flooding.
Even minor flooding can mean major financial difficulties. Imagine just a few inches of floodwater invading your home. That’s more than enough to destroy floors, damage walls, and ruin appliances – costing you thousands (more on that later).
What flood zone am I in?
Below are three major categories of flood zones. To get the specifics on what flood zone you live in, find an agent or contact us.
A Zones are usually located near a river, lake or stream – making them the second highest risk zone. Average premium is around $557 annually.
V Zones are usually located near the ocean. This makes them particularly vulnerable to storm surges (flooding caused by hurricanes). V Zones represent the areas at highest risk, and premiums in this zone are the most expensive. Average premium is around $1,000 annually.
B, C, X, and A99 Zones are less prone to flooding. Depending on your area, you may qualify for a Preferred Risk Policy and pay as little as $119 per year. Remember that almost 25% of all flood claims come from these “low-risk” zones.
Where do I stay when my home is flooded?
Only if your home has been destroyed can you qualify for temporary housing (assuming a presidential disaster was declared). Fortunately, you can prepare in case you don't qualify.
Can I wait for a flood warning to buy a flood policy?
Putting off something this important is never a good idea. Especially since there’s a mandatory 30-day waiting period on new flood policies.
However, there’s usually no waiting period for flood insurance when it’s purchased in connection with making, increasing, renewing, or extending a loan.
I’d like to learn more. Where do I go?
Get the latest on flooding in your area plus tips on preparedness in our Storm Season section at floodfacts.com.
For more information about the National Flood Insurance Program, visit their site: floodsmart.gov.*
Can I talk with a flood expert?
You bet. For any questions or comments, find an agent or contact us.