Flood Insurance or Low Interest Loan

Why Flood Insurance is better than Federal Disaster Assistance

Flood Insurance is one way to help prepare for the risk of damage from spring floods. The National Weather Service (NWS) forecasted that the Midwest, South, and East are at risk for imminent flooding in the spring of 2010. Major flooding has already begun in the Midwest due to a snowpack that is more extensive than in the past few years, and the consistently cold temperatures limited snow melt and runoff. With warming temperatures, above normal stream flows, higher than average precipitation in December—up to four times above average—and the ground frozen to a depth as much as three feet below the surface, conditions in the Midwest are ripe for flooding.

Record snowfall in the Mid-Atlantic States, warming temperatures, and torrential rains contributed to extensive flooding in several states in March. And according to the NWS, the South and East are also more susceptible to flooding as an El Niño type winter left the area soggier than usual. By buying flood insurance you can protect your homes and businesses. Flood insurance is an important layer of protection for you because damage caused by flood is usually not covered under a standard homeowners policy.

One objection you may be thinking is that flood coverage is not needed because disaster assistance from the federal government will bail you out. Not quite true. Here are some facts about federal disaster assistance that you may not know:

· The Governor of the State must request a major disaster declaration from the President.

· Disaster assistance is available only when there is a presidentially declared disaster.

· Federal disaster assistance is not available in all flooding incidents.

· An application for disaster assistance must be filed with the federal government.

· Disaster assistance is typically made in the form of a loan from the Small Business Administration (SBA) and it must be paid back with interest.

· Federally-backed disaster assistance for flood damage typically requires the purchase of flood insurance.

· If the insurance obligation is not met, your customer may become ineligible for future assistance.

Flood insurance is the prudent choice for your best protection. It puts you in control. Homeowners, businessowners, and renters can all buy flood insurance, as long as their community participates in the National Flood Insurance Program. You don’t have to wait for the President to declare a disaster before flood insurance will respond. You are in control.  You can choose the amount of coverage, up to the Program limits, rather than being told by the federal government how much you can borrow.

You may be thinking about the cost of flood coverage or you may have already told your agent that it is too expensive. Consider the alternative: The monthly payment on a $50,000 disaster home loan at 4 percent interest is about $300 for 20 years and FEMA reports that the duration of an SBA home loan can extend even longer to 30 years. There are no pay back requirements when you are paid for losses under a flood policy.

Since there is a standard 30-day waiting period for flood insurance coverage to go into effect, by selling flood insurance now, you still have time to help protect your family from the risks of imminent flooding.

To find out more information about flood insurance, contact your local, independent  Insurance Agent or visit us at www.holdenagency.com.   Also refer to www.floodsmart.org for a list of towns and dates for the new flood zones to go into effect.

Knowledge is power, don't let this one slip by you!

Article courtesy of Travelers Insurance.