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The National Flood Insurance Program (NFIP) was established in 1968 to enable property owners to purchase flood insurances as protection against losses due to floods. Sadly, floods are the most common natural disaster in the United States. It is also the costlier. Fortunately, certain communities are eligible for participating in the NFIP. We will discuss the requirements for joining the program to find out if you are eligible for it.
Eligibility for the National Flood Insurance Program
To participate in this program, a community must adopt and enforce the regulations that meet the requirements of the National Flood Insurance Program. The requirements are intended to reduce the members of the community’s costs for flood relief and to prevent any loss of life or property. Nationwide, over 20,000 communities have joined the National Flood Insurance Program.
The flood hazard map provided by the Federal Emergency Management Agency (FEMA) must be studied carefully by the community. It has to determine whether the insurance and the floodplain management are beneficial to the citizens of the community.
An important matter that some property owners may not be aware of is the fact that homeowners insurance policies do not usually cover flood losses. Furthermore, many property owners are not aware that their residing area is flood-prone. Any community can join the National Flood Insurance Program, regardless of the fact that it may not be flood-prone. Citizens participating in this program will then be able to purchase the flood insurance.
What Are the Requirements for Joining NFIP?
Citizens living in high-risk areas that have a mortgage from a federally regulated lender are obliged to purchase a flood insurance. Furthermore, they must carry it for the life of the mortgage. Other citizens with a mortgage but living in outside a high-risk area, can also purchase the flood insurance. They may also qualify for Preferred Risk Policies.
The minimum management requirements that communities must adopt in order to join the National Flood Insurance Program are located in the Title 44 of the Code of Federal Regulations, section 60.3. Each of the requirements depends on the type of hazard data that FEMA provides the community with.
However, meeting the requirements is not enough. The floodplain management regulations of a community must also be legally enforceable. State authority for floodplain management differs from State to State. It is quite possible for your State to require superior regulations than the minimum requirements of the NFIP.
Certain States require that the communities who wish to join NFIP must submit the floodplain management regulations for approval to the State. The State NFIP Coordinating Agency can offer assistance to any community who wishes to find out the State’s requirements.
Contact the Federal Emergency Management Agency Regional Office or the National Flood Insurance Program State Coordinating Agency for more information. They can provide you with the model floodplain management ordinance and all the guidance needed to meet the required conditions.
What Types of Regulations Are There?
The floodplain management regulations for communities are generally zoning ordinances, subdivision ordinance, building codes, sanitary regulations, and “stand alone” ordinances.
The approach of each community depends on the State laws and how they choose to manage their flood hazards.
What Is the Waiting Period?
Generally speaking, a policy will only take effect after 30 days from the purchasing of the flood insurance. However, if a citizen purchases the policy in connection with a mortgage, the waiting period does not apply.
Do I Need the Flood Insurance?
Yes. Even if you live in a low-to-moderate flood risk area, it is advisable you purchase the flood insurance. All areas are susceptible to some degree of flooding. As a matter of fact, communities living outside the high-risk areas make for approximately 25 percent of the NFIP’s claims.
Property owners should ask their agents if they qualify for the Preferred Risk Policy. This provides low-priced flood insurance protection. It can even go as low as $112 a year.
How Do I File a Claim?
Filing a claim is a three-step process:
- Notify the insurer. Contact your agent or the insurance company to start filing the claim. An adjuster should usually contact you after a couple of days since filing your claim. If this does not happen, then contact your insurer again.
- Document the damage. You will need evidence of the damage (both to your home and possessions) to prepare the repair estimate. Consequently, you must take photos of any damage. This includes anything from discarded objects to structural damage. You should also make a list of both lost and damaged objects. Include their value, date of purchase, and receipts.
- Complete the Proof of Loss. The Proof of Loss is a sworn statement made by the insured regarding the amount that they claim. Your adjuster will help you prepare this statement. You must file the Proof of Loss with your insurer within 60 days from the disaster.
What Happens If I Do Not Join NFIP?
Non-participating communities that are not flood-prone are not a subject to any sanction. However, if a community that has been identified as flood-prone does not qualify for the NFIP within a year, the following sanctions apply:
- Property owners will no longer be eligible to purchase the NFIP flood insurance policy.
- Federal grants or loans for development will no longer be available in identified flood hazard areas.
- Federal disaster assistance will not be provided.
- Federally insured and regulated lending institutions will not be allowed to make loans for insurable buildings.
- Federal mortgage insurance and loan guarantees will not be provided.
While the participation in this program is voluntary, it is important you join NFIP. An important benefit of participation is that you and other members of the community are provided with the opportunity protect yourselves from flood losses. Another important aspect is the fact that certain communities may be sanctioned if they do not qualify for the program. Which is highly detrimental considering that Federal agencies will no longer provide financial assistance for citizens in specific flood hazard areas. Now that you know the benefits and the consequences of not joining NFIP, make the right decision for your wellbeing.
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