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Flood Insurance

Updated info:
Ohio Committee for Sever Weather Awareness: Flood information
National Flood Insurance Program
Insurance Information Institute: Flood insurance
FULL TEXT (Rev. 10/05)

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 Department of Homeland Security’s 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. Nearly 20,000 communities participate in the program nationally. In Ohio, 724 (638 municipalities, 86 counties) participate in the NFIP. There are 73 communities in Ohio (71 municipalities and unincorporated areas in two counties, Highland and Hardin) with flood hazard areas not participating.

NFIP statistics for Ohio and US

NFIP had over 4.56 million policyholders in the US, totaling nearly $745.8 billion in coverage at year-end 2004. In 2003 there were nearly 4.57 million policies in force for $691.8 billion in coverage. Ohio had 36,166 policies in force as of year-end 2004 for nearly $3.96 billion of coverage. This compares to 34,738 policies in Ohio in 2003 for $3.9 billion of coverage.

FEMA estimates that there are about 280,000 structures located in Ohio’s mapped flood plain areas, with a value of $11 billion. About 10% of the structures in Ohio’s floodplains 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 in 2004 was $438 for $163,597 of coverage.

US estimated flood claims data for 2004 shows the number of claims jumped from 32,189 in 2003 to 37,659 in 2004 and the cost of flood losses paid rose from $605.4 million in 2003 to $1.2 billion in 2004.

Ohio’s loss picture from 1978–2004 shows a total of 17,249 losses with payments of over $136 million. The average cost of a flood insurance policy in Ohio at year-end 2004 was $568. The average coverage per policy was $109,446. 2004 flood insurance policies in force by state can be found below.

Annual fatalities (based on a 30-year average) from four weather hazards: Floods (107 deaths), lightning (67 deaths), tornadoes (65 deaths) and hurricanes (14 deaths).
(National Weather Service from USA Today, 8/25/04)

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. 93 insurance companies participate in the NFIP’s Write Your Own (WYO) program. Through this program, insurance companies have arrangements to sell and service flood insurance policies (including settling claims) under their own names while the federal government underwrites the coverage. About 95% of all 2004 NFIP policies were written through WYO companies. WYO carriers wrote about 86% of Ohio’s flood 2004 policies.

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:

  • Homeowners 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
  • Residential property can be insured up to $250,000; furnishings and contents coverage can be purchased up to $100,000. Non-residential 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.
  • 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.

2004 flood policy changes

The Preferred Risk Policy (PRP) was introduced in 1989 for low-to-moderate risk residences. A major overhaul to this policy went into effect for all new or renewed PRPs on May 1, 2004.

PRP insurance policy changes included:

  • Extended coverage: Coverage will apply not only to 1–4 family residences, but also to other residential property such as tourist and rooming houses, and non-residential occupancies.
  • Coverage limits raised: 1–4 family residential limits will increase from $250,000/$60,000 (current limits of building/contents) to $250,000/$100,000 (new), with a premium increase of $1.00.
  • New offer of non-residential buildings/contents coverage: Maximum coverage will be $500,000/$500,000.
  • Extended coverage for renters: Contents-only coverage will be extended to owners and tenants of all eligible occupancies, except when contents are located entirely in a basement.

PRP eligibility is based on the property’s cumulative history of flood loss. Guidelines have been established for a property to meet in order to be eligible for this type of flood policy.

Flood insurance policy forms are available on the Web at www.fema.gov/nfip.

Nearly 90% of all US declared disasters involve some flood damage. Of the 8–11 million homeowners who live in flood areas, only 4.4 million are covered by the flood insurance. About 25% of flood claims are paid to homeowners who live outside of flood zones, in areas where flood risk is designated as low to moderate.
(The Wall Street Journal, 11/16/04)

Facts about cost and coverage

According to the NFIP, the number of flood insurance policies in force in the US and its territories has increased steadily since 1980. There was a 24% increase in US flood policies in force between 1995–2004 (last 10 years), from about 3.5 million to nearly 4.6 million. The number of flood insurance policies purchased by Ohioans increased nearly 26% in the same period.

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 (PRP). These policies cost between $233–263 a year for $100,000 in structural coverage and $40,000 for contents. (Note: See above for outline changes in the PRP effective May 1, 2004.)

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.

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.

Recent Ohio flood events

Floods and flash floods are two leading severe weather-related killers in the US. In Ohio, there have been more than 50 flood-related deaths during the last 10 years. Five Ohioans suffered flood-related deaths in September 2004, and of the nine storm-related deaths that occurred during the December 2004–January 2005 snow, ice and flood emergency, two were flood-related.

Approximately 90% of all federally declared disasters include flooding. Although not all disasters are of the magnitude to receive a federal or presidential declaration, Ohio received three federal disaster declarations in 2004, all due to severe flooding:

  • 8 counties were eligible for federal assistance from the January floods.
  • 21 counties received federal assistance from the May and June storms and flooding.
  • 15 counties received federal assistance from the August and September storms and flooding.
    Individual assistance provided for these three Ohio flood disasters totaled more than $66.6 million. See the chart below for recent Ohio federally declared disasters.

NFIP Reauthorization Bill

The National Flood Insurance Program Reauthorization Act of 2004, aimed at extending the flood insurance program through 2008, passed in June 2004. The new NFIP Act also contains provisions that target repetitive loss properties by sharply raising premiums for owners of high-risk flood properties who refuse government assistance designed to mitigate future flood losses. The bill would authorize $200 million over the next five years for this effort.

Repetitive loss properties are defined as those with two or more claims of more than $1,000 over the deductible within a 10-year period. This pilot program applies to about 6,200 properties nationally.

Flood safety resources

  • NFIP—Rich Slevin, 630-577-1407
  • Ohio Dept. of Natural Resources
    614-265-6750
  • Ohio Emergency Management Agency (EMA)
    614-799-3695
    http://ema.ohio.gov
  • NFIP Agent Referral Program
    1-800-427-4661
  • NFIP Web site: www.fema.gov/nfip
Through May 2005 the highest average flood loss, according to FEMA, were claims related to Hurricane Ivan (September 2004). The average flood insurance claim was $48,258. Paid flood losses related to Hurricane Opal (October 1995) came in second, averaging $40,318.
2004 Top 10 Federal Flood Insurance Writers
Company/Group
Direct Premiums
Written
Market Share in %
1.
State Farm Group
$276,095,000
15.4
2.
Fidelity Natl. P/C Ins. Co.
213,524,000
11.9
3.
Allstate Insurance Group
189,620,000
10.6
4.
Hartford Fire Group
154,024,000
8.6
5.
St. Paul/Travelers Group
120,098,000
6.7
6.
Fidelity National Ins. Co.
106,077,000
5.9
7.
Assurant Group
91,405,000
5.1
8.
Nationwide Group
78,646,000
4.4
9.
Selective Ins. Group
77,957,000
3.4
10.
USAA Group
66,604,000
3.7
Total US Companies
$1,787,668,000

Source: NAIC Annual Statement Database, via National Underwriter Insurance Data Services/Highline Data

2004 Flood Insurance Policies in Force by State
(as of 12/31/04)
State
Policies
Insurance in Force
Written Premiums
Alaska
2,429
$410,806,000
$1,367,078
Alabama
41,912
5,874,998,100
18,995,016
Arkansas
15,067
1,328,685,800
6,625,744
Arizona
29,078
4,971,496,600
12,810,939
California
261,693
48,630,258,900
144,094,614
Colorado
15,377
2,731,000,800
9,406,854
Connecticut
30,291
5,361,615,600
22,238,998
District Columbia
1,115
118,767,900
251,637
Delaware
18,490
3,236,564,300
9,133,232
Florida
1,873,521
315,745,783,300
661,755,539
Georgia
70,475
13,091,223,300
35,052,601
Hawaii
49,379
6,518,240,000
16,498,002
Iowa
9,746
1,048,416,800
5,800,092
Idaho
5,651
960,817,900
2,632,224
Illinois
44,444
5,438,951,500
24,508,633
Indiana
26,854
2,898,349,900
14,969,326
Kansas
9,933
1,032,011,200
5,161,187
Kentucky
20,921
2,026,249,600
10,726,735
Louisiana
380,192
53,904,745,400
172,356,749
Massachusetts
40,473
7,179,163,300
31,530,469
Maryland
54,882
8,024,424,700
20,825,108
Maine7,064
1,087,286,000
4,520,654
Michigan25,447
3,190,916,200
14,378,989
Minnesota8,391
1,205,420,500
4,506,962
Missouri22,397
2,637,960,300
13,355,253
Mississippi42,320
5,216,529,100
18,897,629
Montana3,364
413,215,400
1,655,696
North Carolina109,097
19,460,901,600
52,820,173
North Dakota5,136
685,063,400
2,558,173
Nebraska13,617
1,498,516,800
6,838,391
New Hampshire5,211
758,552,900
3,366,084
New Jersey189,830
33,157,987,700
114,080,142
New Mexico12,655
1,420,692,600
5,764,831
Nevada15,525
3,067,884,600
6,900,556
New York100,121
17,529,079,900
69,361,047
Ohio36,166
3,958,213,900
20,531,821
Oklahoma13,843
1,512,274,100
6,629,086
Oregon26,351
4,420,918,200
13,444,057
Pennsylvania60,779
8,009,138,700
36,445,946
Rhode Island11,774
2,056,921,200
9,844,171
South Carolina148,301
28,774,978,300
68,666,232
South Dakota2,997
364,396,900
1,659,579
Tennessee17,623
2,456,131,800
9,053,674
Texas459,522
84,458,203,300
182,539,047
Utah2,862
452,812,900
1,350,723
Virginia84,492
14,220,603,400
38,990,200
Vermont2,969
379,258,300
1,959,000
Washington29,0434,633,031,700
15,138,795
Wisconsin12,861
1,518,076,900
7,035,271
West Virginia21,424
1,801,059,000
11,619,817
Wyoming2,159
306,984,000
1,157,503
US Total4,558,696
$745,791,028,600
$1,997,567,722

Source: Federal Emergency Management Agency, National Flood Insurance Program,.

Source: Federal Emergency Management Agency, National Flood Insurance Program

According to the Federal Emergency Management Agency during the period of a 30-year mortgage, a property in an area of high flood risks has a 26% chance of being flooded, compared with a 1% chance of losses from fire.

Ohio Federally Declared Disasters
(2000–May 2005)
Declaration &
(Incident Dates)
Incident Type/Estimated Losses
Major Affected Ohio Counties
March 7, 2000
(Feb. 18–Mar. 2)
Severe storms, flooding
$1.1 million
Adams, Gallia Jackson, Lawrence,Meigs, Pike, Scioto
Aug. 21, 2000
(Jul. 29-Aug. 2)
Severe storms, flooding
$4.1 million
Lucas
Sept. 26, 2000
(Sept. 20)
Tornado, severe storms
$4.5 million
Greene
Aug. 8, 2001
(Jul. 17–18)
Severe storms, flooding
$4.3 million
Brown, Butler, Clermont, Hamilton
Nov. 18, 2002
(Nov. 10)
Severe storms, tornadoes
$11.7 million
Cuyahoga, Hancock, Ottawa, Summit, Paulding, Putnam, Seneca, Van Wert. Ashland, Auglaize, Coshocton, Franklin, Henry, Huron, Lorain, Medina, Paulding, Putnam, Sandusky, Summit, Union, Wayne, Wood
March 14, 2003
(Feb. 14–17)
Severe winter storm
$40.9 million
Adams, Jackson, Lawrence, Pike, Athens, Belmont, Darke, Delaware, Fayette, Franklin, Gallia, Greene, Guernsey, Harrison, Hocking, Jackson, Licking, Madison, Meigs, Monroe, Montgomery, Morgan, Muskingum, Noble, Preble, Ross, Scioto, Union, Vinton, Washington
July 15, 2003
(July)
Severe storms, flooding
$6.4 million
Auglaize, Columbiana, Crawford, Darke, Logan, Mahoning, Mercer, Pike, Shelby, Van Wert
Aug. 1, 2003
(Jul. 21–late July)
Tornadoes, flooding, high winds, severe storms
$132 million
Carroll, Columbiana, Cuyahoga, Trumbull, Franklin, Jefferson, Mahoning, Stark,
Medina, Portage, Richland, Summit
Sept. 24, 2003
(Aug. 14–17)
Power outage
$3.7 million
Ashland, Ashtabula, Cuyahoga, Erie, Geauga, Huron, Knox, Lake, Lorain, Lucas, Portage, Summit, Trumbull
Jan. 27, 2004
(Jan. 3–30)
Severe storms, flooding, mudslides, landslides
$2.5 million (as of 6/04)
Franklin, Jefferson, Licking, Morgan, Ross, Tuscarawas, Washington, Athens. Belmont, Guernsey, Harrison, Monroe, Noble, Perry, Tuscarawas, Washington
June 3, 2004
(May 18 – June 21)
Severe storms, flooding
$17.7 million (as of 7/04)
Athens, Carroll, Columbiana, Crawford, Cuyahoga, Delaware, Geauga, Guernsey, Harrison, Holmes Hocking, Licking, Logan, Lorain, Mahoning, Medina, Noble, Perry, Portage, Richland, Stark, Summit, Tuscarawas
Sept. 19, 2004
(Late Aug. and Sept. 21)
Severe storms, flooding, from hurricanes Frances and Ivan
$33.3 million (as of 11/04)
Athens, Belmont, Carroll, Columbiana, Harrison, Jefferson, Monroe, Morgan, Muskingum, Noble, Perry, Stark, Trumbull, Tuscarawas, Vinton, Washington, Guernsey, Lawrence, Mahoning
Feb. 15, 2005
(Dec. 22, 04 – Feb. 1, 05)
Winter storms, flooding, mudslides
$7.7 million (as of 4/05)
Ashland, Athens, Auglaize, Belmont, Clark, Coshocton, Crawford, Darke, Delaware, Fairfield, Franklin, Guernsey, Henry, Hocking, Holmes, Huron, Jefferson, Licking, Logan, Miami, Morgan, Muskingum, Pickaway, Pike Richland, Ross, Scioto, Stark, Tuscarawas, Warren, Washington, Wyandot

Source: Ohio Emergency Management Agency.

Ohio Flood Policies in Force 1995–2004
1995
26,761
199629,330
199732,583
199834,528
199935,279
200034,521
200133,830
200233,963
200334,738
200436,166
% increase 1995–2004: 26%
Major US Flood Insurance Events, 1978–May 2005
Date
Event$ Losses in Millions
Sept., 2004Hurricane Ivan$1,324
June, 2001Trop. Storm Allison1,091
May, 1995Louisiana Flood584
Sept. 2003Hurricane Isabel457
Sept., 1999Hurricane Floyd438
Oct., 1995Hurricane Opal400
Sept., 1989Hurricane Hugo375
Sept., 2003Hurricane Isabel372
Dec., 1992Nor’easter342
June, 1993Midwest Flood271
Aug., 1983Hurricane Alicia238
Oct., 1994Texas Flood217
Sept., 1996Hurricane Fran214
Mar., 1993March Storm211
Sept., 2004Hurricane Frances181
Jan., 1996Northeast Flood175
Aug., 1992Hurricane Andrew168
Apr., 1997Upper Midwest Flood158
Oct., 2000Florida Flood157

NOTE: A significant event, according to FEMA, is one with 1,500 or more paid losses, or occasionally one added for other reasons. Events have been named according to the most popular name at the time the events occurred, or if there is no apparent name, one has been created for this report. Event naming is a subjective thing; an event may begin as a hurricane, change to a tropical storm or be nothing but a heavy rain in some states.

Source: FEMA, as of 7/5/05, www.fema.gov/nfip/sign1000.shtm