THE WOODLANDS, Texas, July 18, 2012 /PRNewswire/ -- Many homeowners go to sleep at night with a false sense of security. They have protected their investments in homes and personal belongings with insurance in case of a disaster. However, the very same homes and personal property they assume are protected by insurance remain vulnerable to the most common of all natural disasters – flooding – unless they also have flood insurance. Homeowner, condo, and business insurance policies normally do not cover flooding damage. Fortunately, these same homeowners could easily roll over and sleep well if they had simply signed on to a U.S. government-sponsored program known as NFIP – the National Flood Insurance Program. This FEMA program was renewed by congress June 29, 2012, signed by President Obama, and extended until September 30, 2017.
Richard "Gordy" Bunch, president and CEO of The Woodlands Financial Group (www.twfg.com), one of the country's top-rated independent insurance agencies, was recently recognized with one of FEMA's three "National Agency of the Year" awards for their work with flood insurance. Bunch and FEMA are concerned that there is a broad lack of understanding by home and business owners about how they can be protected because flood insurance is readily and inexpensively available. The average flood claim is $15,000 while the average flood insurance policy costs just over $350 a year.
Bunch laments the fact that the "100-year flood plain" lulls people into a false sense of security as a primary source of misunderstanding about the need for flood insurance. "The 100-year flood rule simply means your home or business has a one percent chance of flooding every year – not once in every 100 years." According to Bunch, "every inch of America is in a mapped flood zone." Almost 25 percent of all NFIP flood losses occur in areas that are not mapped as high-hazard zones. Hurricanes are not the only cause of flooding. Development, expansions, and concrete are major causes of flooding, Bunch says. "New roads and housing developments reduce the land's natural ability to absorb water. Runoff can multiply as much as six times when land is paved over." High risk zones have a six times greater risk of floods than fire, and a one-in-four chance of flooding over a 30-year mortgage.
Bunch confides there is no need to "shop" for flood insurance since all rates are set by NFIP. Rates are quoted on a scale that ranges from a $20,000 building to a $250,000 building and whether the structure has a basement or enclosure. Supplemental contents coverage can then be added at modest additional cost. The newly approved legislation allows for annual rate increases from ten to twenty percent. Finally, Bunch cautions: "There is a 30-day waiting period for new flood policies, so check the long-range weather forecasts and patterns for your area. Don't get caught without an 'umbrella' flood insurance policy!"
SOURCE The Woodlands Financial Group