Waiting for the streams to rise
As flooding becomes more frequent, vulnerable communities in Eastern Kentucky grapple with the extent of the damage they may sustain
When Beattyville and other areas of eastern Kentucky were submerged in March 2021, Gov. Andy Beshear called it the “worst flash flood” he had seen in his life.
But he could see worse, as many Kentucky communities become increasingly vulnerable to catastrophic flooding.
So what are the options on the table for individuals with the means to protect their assets? Here are some basics about the federal government’s National Flood Insurance Program:
What is the National Flood Insurance Program?
The National Flood Insurance Program was created by an act of Congress in 1968 as a means of allocating flood risk and regulating or managing further development in floodplains. Administered by Federal Emergency Management Agency, the program provides primary flood coverage to more than 5 million policyholders through home, general property and condominium policies.
Stakeholders in all 50 states are eligible to purchase policies through the NFIP if their local government or community participates in the program.
Most home and commercial insurance policies do not cover flood-related losses (or only offer such coverage through premium policies), making the federal program essential for those living in flooded areas. or susceptible to flooding.
The NFIP is financed by a mixture of premiums, federal appropriations and loans. In recent years, it has borrowed heavily to pay claims for widespread storms, particularly, according to Congressional Research Service reports, for the 2005 hurricane season – which included the catastrophic Hurricane Katrina – and Hurricane Sandy of 2012.
The NFIP holds over $20.5 billion in debt to the US Treasury, CRS said in a December report. In fiscal year 2020, the program paid more than $438 million in interest.
The federal program requires periodic reauthorization, and Congress is expected to do so no later than February 18.
What does a federal flood policy cover?
Coverage can insure structures and contents, depending on the type of policy, in the event of flooding, which FEMA defines as “excess water over normally dry ground.”
The policies cover up to the maximum coverage limits available, as follows:
- Single family residential structures and 2-4 family buildings – $250,000 for structure and $100,000 for contents.
- Other residential buildings – $500,000 for structure and $100,000 for contents.
- Non-residential – $500,000 for structure and $500,000 for content.
Additional coverage can be obtained privately.
Unlike disaster relief through FEMA, those with flood insurance policies can make a claim even during events that do not produce a disaster declaration.
Once purchased, policies typically have a 30-day waiting period before coverage takes effect.
Am I required to have flood insurance? What is my flood zone?
While NFIP policies are available inside and outside the floodplain, those with federally backed mortgages and in certain special flood risk areas may be required to carry a flood insurance policy.
FEMA’s Flood Insurance Rate Maps (FIRM) designate high-risk areas as areas beginning with A or V.
In addition, people living in high-risk areas who have received disaster assistance from FEMA or the US Small Business Administration must purchase flood insurance to qualify for future assistance.
You can search for COMPANIES related to your property via FEMA Map Portal.
What Are Kentucky Flood Bounties Like?
According to FEMA, the average flood policy in Kentucky costs $796 per year. For high-risk areas, that figure jumps to $1,713.
Premiums are calculated based on a number of factors, including policy type, individual risk and structure location.
A 2019 snapshot of the Kentucky Cabinet of Energy and Environment’s flood insurance showed there were about 20,000 active policies in Kentucky that year, collecting $20.4 million. premium dollars per year.
Payouts vary, but FEMA reports the average claim in the United States in 2018 exceeded $40,000.
Mitigation also plays a role in the calculation of bonuses. Some areas may participate in programs like the Community Rating System to reduce costs for policyholders.