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The 1998 storm season is over, but wet weather no doubt will return in the months to come. Flooding is the nation's most common natural disaster, surpassing the frequency of both earthquake and fire. Homeowners who reside in a flood plain usually are aware of the danger and the potential for property damage, but apartment dwellers are at risk from flooding too.
Many people believe standard homeowner's or renter's insurance policies cover flooding. They don't. Many people also believe the government will bail them out if they are affected by a flood. The truth is that government assistance is granted only if the county is declared a federal disaster area. And even in that case, assistance is limited to emergency relief (e.g., food and shelter) and low-interest disaster recovery loans from the Small Business Administration (SBA). People who have serious disaster-related needs may be able to obtain a disaster relief grant. These grants are intended for low-income individuals and families. The maximum amount is more than $13,000, but the average is around $2,500.
Fortunately, affordable flood insurance is available for renters and homeowners through the National Flood Insurance Program (NFIP), which is managed by the Federal Emergency Management Agency (FEMA). Flood insurance might not enable you to replace all of your belongings exactly as they were before the deluge, but you'll be better off than if you rely solely on emergency relief or a government disaster recovery loan.
To find out whether your apartment building is in a flood-prone area, call any insurance company or independent agent who sells property and casuality insurance. Ask which FEMA zone designation has been assigned to your building. The four basic zones are "A," "V," "B" and "C." The "A" zones are high-risk flood plains, which are also called Special Flood Hazard Areas (SFHAs). The "V" zones (for "velocity") are coastal areas where structures could be damaged by storm-driven waves. The "B" (moderate) and "C" (minimal) zones have lower risk of flooding. Newer maps use "X" instead of "B" and "C." Don't assume you're safe from flood danger if your building is in a moderate or minimal zone. Nearly 30 percent of FEMA's claims on flood insurance come from areas other than the flood plains.
Through the NFIP, renters are allowed to purchase up to $100,000 of flood insurance coverage for their personal belongings. Rates are reasonable because these renter's policies don't cover damage to the apartment building.
Premiums, which vary widely, are based on risk factors and the amount of coverage you want to purchase. There's no need to shop around because all the rates are set by FEMA. There is a 30-day waiting period before a new flood insurance policy becomes effective.
Note that some communities in the nation aren't participating in the NFIP because the flood risk is minimal or the community hasn't met FEMA's requirements, which include having a comprehensive flood management plan. Flood insurance is virtually unavailable in nonparticipating communities.
Your insurance agent should be able to answer any specific questions you may have about flood insurance. .
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