The National Flood Insurance Program (NFIP) is a federally subsidized
program authorized by Congress in 1968 to protect property owners who,
up to that time, were unable to secure flood insurance through the private
insurance industry. The program is administered by the Federal Insurance
Administration (FIA), part of the Federal Emergency Management Agency
(FEMA).
Flood coverage is available in communities that have qualified for participation in the NFIP by agreeing to adopt and enforce flood plain management ordinances designed to reduce future flood losses. About 19,100 communities participate in the program nationally, including 714 in Ohio. There are 56 communities in Ohio (54 municipalities and unincorporated areas in two counties, Highland and Hardin) with flood hazard areas not participating.
NFIP statistics for US and Ohio
The NFIP had 4.27 million policyholders in the US and its territories, totaling nearly $548 billion in coverage as of September, 2000. Ohio had 34,521 policies in force at that date, for about $2.9 billion of coverage. Based on FIA estimates for Ohio, there are about 280,000 structures located in mapped flood plain areas, with a value of $11 billion. Only about 7% of these structures are protected by flood insurance. FEMA estimates that about 30% of flood plain structures nationally carry flood insurance.
The US average flood insurance policy purchased through September, 2000 was for $128,369 of coverage, with an average premium of $390. In May, 1999, the average was a $341 premium for $119,254 of coverage.
Ohio’s overall loss picture since 1978, through September 30, 2000, shows that some 13,896 loss payments have been made totaling nearly $93 million. Based on the number of flood insurance policies written, the average Ohio flood insurance policy through third quarter, 2000 was $487 for $85,000 of coverage (compared to $480 for $79,000 of coverage in 1999). Click here for the number of flood insurance policies in force by Ohio county as of October 1, 2000. State figures, click here.
Policy availability
After a community qualifies for the NFIP, a flood insurance policy may be purchased from licensed P/C insurance agents, brokers or company representatives. About 100 insurance companies participate in the NFIP’s Write Your Own (WYO) program. Through this program, insurance companies have arrangements with FIA to sell and service flood insurance policies (including settling claims) under their own names while the federal government underwrites the coverage. In 2000, 94% of all NFIP policies were written through WYO companies. 82% of Ohio’s flood policies were written by WYO carriers as of September 30, 2000.
Coverages available
NFIP coverage is available to all owners and occupants of insurable property (building and/or contents) in a participating NFIP community.
Flood insurance is available to:
- Home owners for protection of their structure and contents, and renters for protection of contents
- Builders in the course of construction, condominium associations and condominium owners
- Condominium associations that can purchase a master policy to cover both the common areas and their members’ individually owned units
- Residential condominium unit owners may purchase building and contents flood insurance to supplement the association’s policy
- Owners of nonresidential condominium units may purchase contents coverage
Homes can be insured up to $250,000; furnishings and contents coverage can be purchased up to $100,000. Commercial property can be insured up to $500,000 on the building and $500,000 on contents. All policies carry a deductible, usually $500 or $1,000, with the deductible applying separately to structure and contents coverages.
There is a 30-day waiting period before new or modified flood insurance policies go into effect. Exceptions include loan-related mandates, flood plain map-related revisions and certain renewal increases. Lenders are required to notify borrowers or lessees when a property is located in a special flood hazard area that makes flood insurance mandatory.
Policy changes for 2001
The FIA began issuing revised flood insurance policies on December 31, 2000. Existing policyholders with old dwelling, general property or residential condominium building association flood insurance policies are entitled to the extended coverages as well. Copies and summaries of the new forms are available on the NFIP website at www.fema.gov/nfip/sfip.htm. Standard flood insurance policy changes include:
- Additional coverage option for property owners: Property owners with building additions or extensions attached to the main insured building by a rigid exterior wall, solid load-bearing wall, stairway, elevated walkway or roof now have the option of purchasing separate coverage for these additions or extensions.
- Coverage limits raised: Limits of coverage for items such as fine art and jewelry and for loss prevention efforts such as sandbagging have been raised.
- Extended contents coverage for condominium owners: Interior walls, floors and ceilings not covered under the condo association’s master policy are covered under the residential policy.
- Extended coverage for renters: Coverage has been extended to include stoves or refrigerators owned by the renter. A 10% of coverage clause was also added for improvements made by the renter to the building.
- Coverage limitations added: Coverage for detached carports, outdoor spas and hot tubs has been eliminated. New coverage limits apply to mobile homes and travel trailers eligible for replacement cost coverage.
- Clarifications: Land subsidence and the circumstances under
which flood losses are covered have been redefined.
Facts about cost and coverage
According to the FIA, the number of NFIP policies in force more than doubled between 1985–1999, from about 2 million to about 4.27 million. The number of flood insurance policies purchased by Ohioans also doubled between 1990 and 2000 (click here for Ohio flood facts).
The NFIP estimates that 90% of all natural disasters involve flooding and between 25–30% of flood insurance claims are for damage in low risk areas due to the increased severity of storms.
Homeowners/renters insurance policies do not typically cover losses due
to flooding. Flooded vehicles, however, are covered under the comprehensive
portion of an auto insurance policy.
Property does not have to be located in a flood plain to qualify for coverage.
As long as the property is located within an approved NFIP community,
it is eligible for flood insurance.
The cost of a flood policy depends mainly on location. About one in four policies written are for properties not located in a flood plain. 1–4 unit residential buildings not located in “special flood hazard areas” by the NFIP are likely candidates for a preferred risk policy. These policies cost between $196–$221 a year for $75,000 in structural coverage and $18,000 for contents. Deductibles apply to each.
Flood insurance protects against damages caused only by surface flooding and has limited coverage in basements. It does not generally cover basement sewer backup or sump pump failure; however, there are certain loss conditions where such coverage may apply. Coverage for sewer backup is available as an endorsement to most homeowners policies. Some deluxe or all-peril homeowners insurance policies provide this as standard coverage.
Finished portions of a basement (walls, floors, ceilings and contents) are not covered under flood insurance. Other exclusions typically include gas and liquid storage tanks, walks and driveways, motor vehicles, landscaping, crops and livestock.
Unimproved structural parts such as the foundation, walls, stairways and utility connections are covered by flood insurance. Other items usually covered include sump pumps, water tanks, furnaces, water heaters, heat pumps, washers and dryers, food freezers, air conditioners and clean-up, as part of the structural coverage.
Types of floods and flood stages in Ohio
Three types of flooding occur in Ohio: general river floods, urban and small stream, and flash floods. General river flooding occurs after heavy rainfalls. Since it occurs slowly, residents usually have advance warning in order to prepare for evacuation if necessary. Urban and small stream flooding occurs when heavy rain falls in shorter periods of time. Storm sewers and small streams cannot handle the runoff, which results in flooded underpasses and basements, and backed-up sewers.
Flash flooding is always life-threatening because it occurs very quickly. 2–4 inches of rain in a couple of hours can trigger a flash flood.
(Kansas City Star, 4/9/00)
Ohio flood events
Ohio’s major flood-related event in 2000 resulted from heavy rains between February 18–March 2. Seven southern Ohio counties were part of a federal disaster declaration which left two dead. Scioto County was hardest hit, with flood damage also reported in Adams, Gallia, Jackson, Lawrence, Meigs and Pike counties. Lucas County was also declared a federal flood disaster area after heavy rains caused flooding the last weekend of July. Additional information on both events can be accessed from the Ohio Emergency Management Agency’s website at www.state.oh.us/odps/division/ema/Public.htm.
Additional flood safety resources
- NFIP—Rich Slevin/Guy Matheson, 630-577-1407
- Ohio Dept. of Natural Resources, 614-265-6750
- Ohio Emergency Management Agency (EMA), 614-799-3695;
www.state.oh.us/odps/division/ema - NFIP Agent Referral Program, 1-800-427-4661
- NFIP website: www.fema.gov/nfip
(Federal Insurance Administration)
(Best's Review, November 2000)