The Benefits of Flood Insurance Vs. Disaster Assistance
The National Flood Insurance Program recently polled consumers on the perceived benefits of Flood Insurance. Surprisingly, many people felt that Flood Insurance was not neccessary, because Disaster Assistance is available in times of flooding disasters. However, this is an incorrect assumption, as there are many situations that would result in no response from Disaster Assistance.
Here are a few benefits of flood insurance, versus disaster assistance:
- With flood insurance, you are in control. Flood insurance claims are paid even if a disaster is not declared by the President. With disaster assistance, they are only available if the President declares a federal disaster.
- Between 20-25% of all claims paid by NFIP are outside of Special Flood Hazard Areas. Federal disaster assistance declarations are not awarded in all flooding incidents.
- With flood insurance, there is no payback requirement. With Disaster Assistance, most assistance comes from loans that must be repaid with interest.
- Flood insurance policies are continuous, and are not non-renewed or cancelled for repeat losses. Disaster assistance is much less dependable.
- Flood insurance reimburses you for all covered building losses up to $250,000 and $500,000 for businesses. Contents coverage is also available for up to $100,000 for homeowners and $500,000 for businesses. The average individuals and Households Program award for Presidential disaster declarations related to flooding in 2008 was less than just $4,000.
- The average cost of a flood insurance policy is a little more than $500 annually. The cost of a preferred policy is less than $200 annually, depending on where you live. Repayment on a $50,000 SBA disaster home loan is $240 a month, or $2,880 annually at 4% interest.
Talk to your insurance agent about quoting flood insurance for your home or business today.