Major flooding in Eastern Kentucky in recent days has led to at least 35 deaths as of Monday, as well as widespread damage to homes and businesses.
Severe weather is continuing to hit the region, but the tragedy has already raised questions about how residents nationwide can prepare for future flooding, and namely, if they should buy flood insurance.
Most homeowners insurance policies do not cover flooding.
In 1968, Congress established the National Flood Insurance Program (NFIP), a system managed by the Federal Emergency Management Agency (FEMA) that enables property owners and renters to purchase flood insurance for their communities in exchange for their communities adopting regulations that reduce potential flood damage.
Americans with homes or businesses in high-risk flood areas with government-backed mortgages are required to have flood insurance, but the program is available to more than 22,500 communities across the country that have varying flood-risk levels.
FEMA suggests that all residents consider buying flood insurance, no matter where they live or how significant the risks may seem.
“Flooding can happen anywhere at any time,” FEMA’s flood preparation website says. “Poor drainage systems, summer storms, melting snow, neighborhood construction and broken water mains can all result in flooding.”
More than 40 percent of filed NFIP claims between 2014 to 2018 were from regions outside of high-risk flood areas, according to FEMA. The program has received a total of 2.5 million claims since its inception.
The program is conducted in partnership with more than 50 insurance companies to offer the same rates and coverage, and premiums are determined based on a methodology that includes the value of one’s home and the property’s flood risk.
Policies under NFIP also include standard coverage limits.
The limits include a maximum $250,000 benefit for repairing a single-family homeowner’s building or a $100,000 maximum benefit for damaged contents for renters and homeowners. Businesses’ buildings and contents are each protected at a maximum benefit of $500,000.
Today, NFIP protects more than 5 million policyholders’ combined $1.3 trillion in assets, according to FEMA.
In major flooding situations, presidents can issue a disaster declaration to make available aid to supplement recovery efforts. President Biden did so for areas of Kentucky on Friday, and added individual assistance on Saturday.
FEMA says the aid comes in two forms: loans that require repayment or a FEMA disaster grant that includes an average of $5,000 per household, which is far less than the average flood insurance claim. The agency still suggests NFIP flood insurance for the best protection.
“Disaster assistance from FEMA and the U.S. Small Business Administration is designed to kick-start recovery, but is not enough restore your home to its pre-disaster condition or to replace your treasured household items,” FEMA says.
Flood insurance policies typically have a 30-day waiting period before coverage takes effect.