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New Jersey Flood Insurance Facts and Figures

Why Do I Need Flood Insurance?

Flooding is nature’s most common natural disaster. The average homeowner is five times more likely to incur flood damage than fire damage. The chances only increase if you live in medium or high risk zones. New Jersey homeowner’s policies may not cover the flood damage, and the out-of-pocket costs can be burdensome.

You would need to look very carefully at what causes the flooding in your area and how high the water near your home rose. Because rainfall amounts are different when a storm moves across an area, a “100-year flood” may occur in some places but not others. There are many factors that can add to flooding, including debris in the waterway, small road culverts and bridges, frozen or saturated ground, and others.

What is NFIP?

NFIP is the National Flood Insurance Program. Nearly 20,000 communities across the United States and its territories participate in the NFIP by adopting and enforcing floodplain management ordinances to reduce future flood damage. In exchange, the NFIP makes Federally backed flood insurance available to homeowners, renters, and business owners in these communities. Community participation in the NFIP is voluntary.

New Jersey Flood insurance is designed to provide an alternative to disaster assistance to reduce the escalating costs of repairing damage to buildings and their contents caused by floods. In addition to providing flood insurance and reducing flood damages through floodplain management regulations, the NFIP identifies and maps the Nation’s flood plains. Mapping flood hazards creates broad-based awareness of the flood hazards and provides the data needed for floodplain management programs and to actuarially rate new construction for flood insurance.

What Are My Chances of Flooding?

Floodfacts.com states the following – Live in a high-risk area? You’ve got a 1 in 4 chance of flooding during the life of your 30-year mortgage.

You’re Also:

  • 5 times more likely to experience flooding than fire
  • More likely to have your home burglarized
  • More likely to have your car stolen

And you don’t have to live in a high-risk zone to be a victim. Almost 25% of all Flood claims come from low- to moderate-risk areas. In fact, 90% of all presidential-declared disasters involve flooding. Even minor flooding can mean major financial burdens.

Is Purchasing Flood Insurance Required by Law?

If you have a federally backed mortgage on a home located in a high-risk zone, federal law requires you to purchase flood insurance to secure a loan. Also, if you’ve received a federal grant for previous flood losses, you must have a flood policy to qualify for future aid.

Does my Homeowner’s Policy Cover Flood Damage

No. While your Homeowner’s policy may cover fire, tornado or even earthquake damage, most exclude damage caused by flooding — nature’s most common natural disaster. Those that cover some flood damage only do so by a specific endorsement, and only for a certain dollar amount. Check with your insurance agent to see what coverage is available.

Can I Wait for a Flood Warning Before Buying a Flood Policy?

You may choose to do so, but be aware there is a standard waiting period of 30 days before a flood policy becomes effective. If you delay, it may be too late. Insurance purchased in connection to loans or recently rezoned areas are an exception and are effective immediately.

What is Flood Proofing?

Flood proofing is available only to commercial properties. Generally, flood proofing will create a watertight ‘membrane’ to prevent water from entering the building and at the same time allow the building’s walls to withstand the great pressure that is generated by the tremendous volume of water against the building. It is because of the pressure of the floodwaters on residential basements are not normally likely candidates for flood proofing.