Flood insurance - a good investment in your home

Terry Sheridan of Bankrate.com has a timely article on flood insurance and the need for this particular type of insurance. As Sheridan says, "You probably need it." refinance mortgage closings

Highlights FEMA says flooding is the most common and costly type of disaster in the U.S. There's a lag time, so you can't wait until water is rising to buy flood insurance. A flood policy in a high-risk area can cost thousands of dollars a year.

Flooding is the most common and costly natural disaster in the U.S., according to the Federal Emergency Management Agency, or FEMA. FEMA administers the National Flood Insurance Program, or NFIP, the primary source of coverage for homeowners and renters. Congress recently agreed to a five-year extension of the program, which insures 5.6 million property owners.

This have you scared? Don't be, flood insurance is relatively inexpensive when you consider the coverage it provides. For more information about the need for flood insurance and costs involved, read the full article.

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Federal flood insurance program runs in the red

How would you like to live in home that is prone to flooding? How would you like to have it be “flooded 34 times since 1978?” Well, there is such a home, and there are more like it.

“In Wilkinson County, Miss., a home has been flooded 34 times since 1978.

“Extraordinary as the damage may be, even more extraordinary is that an insurer has paid claims every time, required no flood proofing, never raised premiums after a claim and vowed to continue insuring the house. Forever.

“The home's value is $69,900. Yet the total insurance payments are nearly 10 times that: $663,000.

“It's no surprise that the insurer faces huge financial problems.

“The insurer? The federal government.”

Billions of dollars have been paid to the owners of similar homes across the country and there is no end in sight.

Other insurers for casualties and liability are certain that the premiums collected exceed the cost of claims. But not with the federal government in charge.

“Instead it's running deeply in the red. A major reason, a USA TODAY review finds, is that the program has paid people to rebuild over and over in the nation's worst flood zones while also discounting insurance rates by up to $1 billion a year for flood-prone properties.”

In New Jersey, claim histories are not so great either.

As reported in the Asbury Park Press,

“For every dollar the National Flood Insurance Program has doled out since 1978 to repair flooded homes and businesses in New Jersey, 68 cents has been spent to repair properties that have been flooded more than once. Nearly one in seven of those properties is in Monmouth or Ocean counties.”

So, what do you think should be done? It seems that it makes sense that homes that are repeatedly subjected to floods are built where they shouldn’t be. Rather than continuing to pay claims, maybe the homeowners should be bought-out.

What do you think?

Read the entire USA Today report here.

If you have questions about what you see here, contact

Stephen M. Flatow

Stephen's Title Agency, LLC

StephensTitle AT comcast.net

www.stephenstitle.com