Flood Insurance Provides Best Protection to Homeowners

A FEMA administrator responds to Michael Crowley's "Drowning in Dollars" column.

In the November issue of Reader's Digest, The New Republic senior editor Michael Crowley contributed an article titled, "Drowning in Dollars: Who Bails Out Homeowners After They Build or Buy in Flood Zones? You Do." His piece contained many criticisms of the National Flood Insurance Program (NFIP), and flood insurance in general, which merit response.

Here's the bottom line. Devastating floods happen. And they will continue to happen, year after year – in "higher-risk" areas from known river systems and water bodies, but also in "lower-risk" areas from sudden, out-of-the-ordinary rains or other events. Flooding is the nation's most costly natural disaster.

People who suffer flood damage from large events like Hurricane Katrina may be eligible for federal relief, often a loan that must be repaid. But for smaller scale flooding instances that provide no federal aid victims must rely on their own individual insurance policies or their own personal savings to recover from the event.

Private insurers are well aware of the enormous costs from flood damages and for that reason and others, most don't offer insurance for flooding. The National Flood Insurance Program was designed to provide insurance protection to homeowners while at the same time creating safer communities through more stringent and responsible building codes and practices.

However, this is no handout. There are eligibility requirements for this premium-based insurance protection. Communities must agree to adopt and enforce floodplain management ordinances that reflect a commitment to addressing local flood risks. These efforts reduce flood damage by nearly $1.3 billion a year. In fact, buildings constructed in compliance with National Flood Insurance Program standards suffer 80 percent less damage annually than those that are non-compliant. Nearly 20,500 communities across the nation participate in the program and see these benefits every day.

Also, a quarter of all flood insurance claims come from lower-risk areas where flood insurance is not required by lenders. So, "not required" doesn't necessarily mean "not needed." Every year, thousands of people learn the hard way that you don't need to live near a river or coastline to face a flood. Flood insurance is important to own, whether the lender requests it or not.

For more information or help in finding an agent near you, please visit www.FloodSmart.gov.

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