Flood Insurance?

They never thought of it. Twenty-one families living in a small neighborhood well out of the ordinary flood zone for a tributary leading to the Chattahoochee River in Austell, Georgia, were among the hundreds of homes hit by record flooding in the last several months. Atlanta, Nashville and even parts of Oklahoma have all recently seen homes flooded in areas where no living person can recall having ever seen the waters rise.


Construction siltation, re-routed streams, hard surface coatings like streets and parking lots have all contributed to abnormal flooding in areas previously thought safe. Certainly their home owner’s policy has a flood insurance clause, right?

Unlikely. In fact if you do not specifically obtain flood insurance you don’t have it. Read your policy to be sure. Flood insurance, a separate policy for most home owners, is normally backed by a federal government National Flood Insurance Program. In past times when the Program was about to lapse it was a simple process to pass it through congress and it would be re-authorized. Not so in our times of fundamental change.

“Just because you haven’t experienced a flood in the past, doesn’t mean you won’t in the future. Flood risk isn’t just based on history, it’s also based on a number of factors: rainfall, river-flow and tidal-surge data, topography, flood-control measures, and changes due to building and development.” -Floodsmart.gov

Senate Democrats and House members as well have included the re-authorization of the NFIP in another massive bill which includes many unwelcomed fundings. During Senate floor debate on today, June 17, Senator David Vitter (R-Louisiana) strongly urged the Senate to remove the authorization of NFIP from the bill and pass it on a stand alone motion. He wished to introduce a single page bill to accomplish just this but was met with strong objection from Michigan Senator Debbie Stabemore (D).

While both senators agreed it should be passed it was left inside the existing bill due to the objections in an effort to get senate Republicans and Independents to vote yes on the larger spending bill.

Meanwhile hundreds, if not thousands of home sales are being delayed at the peril of the home sellers, buyers, attorneys, loan officers, communities and the economy at large. Lenders will not fund loans on properties which are in a Federal Emergency Management Agency (FEMA) designated flood zone without the buyer funded NFIP meaning no loan, no sale.

“Homes and businesses located in moderate-to-low risk areas that have mortgages from federally regulated or insured lenders are typically not required to have flood insurance. However, flood insurance is highly recommended because 25% of all flood claims occur in moderate-to-low risk flood areas. A lender can require flood insurance, even if it is not federally required.” - Floodsmart.gov

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mwilkins@capitalfmc.com