| Flood Insurance: Introduction | |||
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Flood insurance versus disaster assistance Flood insurance has some key advantages over disaster assistance. Disaster declaration Flood insurance: Flood insurance claims are paid even if a disaster is not declared by the President. Disaster assistance: Most forms of Federal disaster assistance require a Presidential declaration. Claims paid Flood insurance: Between 25-30% of all claims paid by the NFIP are outside the SFHAs. Disaster assistance: Federal disaster assistance declarations are made in less than 50% of flooding incidents. Repayment Flood insurance: There is no payback requirement. Disaster assistance: The most typical form of disaster assistance is a loan that must be repaid with interest. Policy duration Flood insurance: Flood insurance policies are continuous and are not non-renewed or cancelled due to repeat losses. Disaster assistance: The duration of a Small Business Administration (SBA) disaster home loan is 18.5 years. Furthermore, people receiving disaster assistance in a Special Flood Hazard Area are required to purchase flood insurance against flood future additional flooding. Failure to do so could mean no disaster assistance for any ensuing flood. Reimbursement Flood insurance: Reimburses you for all covered losses up to $250,000 for homeowners and $500,000 for businesses. Disaster assistance: The average individual and family grant payment is less than $2,500. Cost Flood insurance: The average cost of a one-year flood policy is $316 annually, or less than a dollar a day. The cost of a $50,000 flood policy is $166 annually (depending on where you live), or less than 50 cents a day. Disaster assistance: The average loan payment on an SBA disaster home loan is $140 a month or $1,680 annually. Repayment on a $50,000 SBA disaster home loan is $320 a month or $3,840 annually. |
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Not only are policy forms, clauses, rules and court decisions constantly changing, but forms vary from company to company and state to state. This material is intended as a general guideline and might not apply to a specific situation. The authors, LunchTimeCE, Inc., CEfreedom, and Insurance Skills Center, and any organization for whom this course is administered will have neither liability nor responsibility to any person or entity with respect to any loss or damage alleged to be caused directly or indirectly as a result of information contained in this course.
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