July 11, 2006 > Good Time To Consider Flood Insurance

by Tina Walker

As California's rainfall season ended June 30, it is a good time for homeowners to sign up for flood insurance in anticipation of next winter's storms. The National Flood Insurance Program is administered by FEMA.

The best time to buy a policy is in the summer. It may be too late once it starts raining again because a new policy does not take effect until 30 days after it is purchased. Floods are the most common natural disaster. As little as an inch of water can ruin the walls, floors and carpets of a home, requiring expensive repairs. About a quarter of National Flood Insurance Program claims are for properties outside floodplain areas.

Homeowners insurance policies do not cover flood damage. But most property owners can buy separate flood insurance. The key requirement is that their local government participates in the federal program. Maximum coverage is $250,000 for residential structures and, under a separate policy, $100,000 for contents. Renters can buy content-only policies. Premiums are tied to flood risk determinations. Persons who borrow from federally-insured lenders to buy properties in high risk areas are required to buy the insurance.

This past winter brought seasonal precipitation levels to between 140 percent and 150 percent of normal in much of central and northern California, according to National Weather Service data. Losses suffered by flood insurance policy holders are covered whether or not a disaster is declared, and the money paid out is not a loan.