Flood Insurance Reform

The US learned a lot about disasters (and how much they can cost) from Hurricanes Katrina, Rita and Wilma in 2005. Rebuilding has been held up by many factors, not the least of which is the slowness of claims payment. It's clear that people need to be insured; it's also clear that the overall insurance plans need to make sense.

Some of the changes to the National Flood Insurance Program (NFIP) are welcome:

  • The waiting period before a flood policy kicks in will be 15 days, down from the current 30. 
  • Coverage limits will be increased to $335,000 for a residential structure and $135,000 for contents. While this won't cover you if you have a more-expensive home or contents, it should certainly help the majority of people who will have a home which falls comfortably within these limits.
  • You'll now be able to get coverage for additional living expenses, basement improvements, business interruption, and replacement cost of contents. Obviously, not everyone needs business interruption coverage, but if you've got a home office or small business, this could be a lifesaver. 
  • While you can get better coverage, the insurers will also be able to ask for higher premiums. The annual increase an insurer will be raised to 15 percent up from 10.
  • As part the package, the current flood maps and elevation standards will be updated.  Out of this effort will result a 500-year flood plain that could be used in the future for insurance purposes.

If you live in hurricane or flood areas, get your insurance now. With any luck, coverage will kick in before any storm comes your way.


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