With spring in the air, properties at risk of flooding

Real Estate Weekly, April 9, 2008 by Tim Dodge

With spring around the corner, the Empire State will once again experience rising temperatures, spring rains and melting snow. In fact, the 2008 Flood Summit recently brought state and local leaders together in Binghamton to develop a flood strategy. The last four years have seen nine floods declared federal disasters in New York state.

Regardless of how close you are to standing water, "Everyone is at risk," according to the National Flood Insurance Program. The NFIP, a program of the Federal Emergency Management Agency, enables property owners in participating communities to purchase insurance protection against losses from flooding.

FEMA's Website states that, "flooding is one of the most common hazards in the United States." Keep in mind that flood levels do not have to be torrential to be destructive. A couple of inches of basement runoff can cause damage to such appliances as washers and dryers.

There are two important factors consumers should be aware: a standard homeowners policy does NOT insure against flooding and property owners as well as renters should consider buying flood insurance soon because it has a 30-day waiting period before taking effect. Consider taking the following steps:

Contact your insurance agent to determine if your community participates in the NFIP, a flood insurance requirement.

Go to www.floodsmart.gov and select the link, "What's Your Flood Risk?" on the upper right-hand side. Enter your address.

Do not assume that the government will bail out victims of flood loss who do not have a flood insurance policy. Federal disaster assistance, if avail able, requires repayment of a loan. For instance, a $50,000 loan at 4 percent interest would be $240 a month for 30 years. In most cases, flood insurance is much less expensive.

Flood insurance is a good investment even if the property is not located in a high-risk area. You may be eligible for a preferred risk policy, with premiums as low as $112 per year for home and personal property coverage.

Renters can purchase $8,000 of contents-only coverage for as little as $61 for a moderate to low risk area. Higher limits up to $100,000 are available. (Coverage is not provided for contents located in basements only.) If property values exceed the NFIP maximum amounts of $250,000 for residential and $500,000 for non-residential properties, speak to your insurance agent about additional coverage.

FEMA is updating its flood maps for Nassau and Suffolk counties and the revision--first in a decade--may change Long Island's flood zones. The cost of flood insurance will also change, and those purchasing before FEMA's project is complete will be grandfathered.

To locate an independent agent in your area, go to www.iiabny.org. The "Consumer Information" tab at the top will reveal the "Find an Independent Agent" link.

An old adage tells us that, "if you don't like the weather, wait five minutes." An exaggeration perhaps, but with the four seasons becoming less predictable, it may be wise to live by the words, "better safe than sorry."

BY TIM DODGE, DIRECTOR OF RESEARCH, INDEPENDENT INSURANCE AGENTS & BROKERS OF NEW YORK, INC.

Tim Dodge is director of research and external communications for the Independent Insurance Agents & Brokers of New York, Inc. Established in 1882, IIABNY has represented the common business interests of independent insurance professionals for more than 125 years. For further information, e-mail Dodge at tdodge@iiabny.org.