he recent flooding from Hurricane Harvey and the approaching expiration of the National Flood Insurance Program opens up a lot of discussion about flood insurance. The program was established in 1968 and expires on Sept. 30.
The concern is that the annual shortfall of this program is $1.4 billion. The intent of the program is to reduce the impact of flooding on structures by providing affordable insurance to property owners. Mortgage lenders require flood insurance for properties located in 100-year floodplains, so not having the program would impact many homeowners here in Deschutes County, particularly those near the Deschutes River in the south county area as well as other areas bordering the Deschutes.
As a realtor, I've observed properties that are not mapped as being within a floodplain, yet they're close to a river and have water under the home because the water table is so high. This was exacerbated by the melting of our heavy snowfall this last spring. A client in such a predicament asked last spring about obtaining flood insurance for their home and was told they could not get flood insurance because they were not in a mapped floodplain—which I found hard to believe.
According to the Federal Emergency Management Agency website, this is not true. You don't have to live in a mapped floodplain to get flood insurance. The site actually addresses common myths about flood insurance. The most common of these myths is that you must live in a floodplain or high-risk area. According to the site, one in four flood claims is for a home not located in a floodplain.
Another misconception is that water damage is the same as flood damage, and therefore a homeowner policy covers everything. All water damage is not the same. For example, if there's a storm that damages the roof and causes water to come through, that would be covered under the homeowner's policy, whereas flooding from an overflowing river bank would be under flood insurance.
Many people think flood insurance covers everything, but according to FEMA, federal flood insurance policies have limits of $250,000, covering the structure only. For personal possessions, the cap is $100,000. Property owners can purchase additional insurance to cover claims above those caps.
It is also important to note that if you were not in a designated flood plain when you bought your home, it doesn't mean you're not in one now. Check out FloodSmart.gov, where you can type in any address and see if it's in a floodplain. Also check with more than one insurance agent about flood insurance, as agents have different levels of sophistication in that area. This is important to check when buying a new home and calculating your additional housing costs. FEMA states that the average cost of flood insurance is $660 annually and that the average flood claim is about $39,000.
