DES MOINES – Did you know that if you live in a “100-year floodplain” (i.e., Special Flood Hazard Area), you have a 26% chance of experiencing a flood during a 30-year mortgage? According to NOAA, floods are the most widespread of weather-related natural disasters in the U.S. FEMA estimates that one inch of floodwater inside your building can cause $25,000 in damage.
Many property owners believe their homeowners' insurance covers physical damage from flooding. Standard homeowners insurance may include an endorsement or rider for sewer backup or sump pump failure. However, they don’t cover flood damage. A separate flood insurance policy can cover damage from overland flooding, rapid rainfall accumulation, or surface runoff.
In June 2024, many communities in northwest Iowa experienced severe flooding. According to FEMA, fewer than 5% of property owners in the hardest-hit areas had flood insurance coverage. As a result, many residents had to depend on federal disaster assistance. The national average for federal disaster grants is $5,000. Additionally, some federal assistance is provided as loans from the Small Business Administration, which must be repaid with interest.
Property owners in each of the 767 Iowa communities participating in the National Flood Insurance Program (NFIP) can purchase flood insurance, even if their property is not located in a high-risk flood zone. Flood insurance can be purchased directly from the NFIP through a network of 50 private companies under FEMA’s Write Your Own (WYO) program, or from private carriers.
A flood insurance policy is one of the few tools available to property owners for recovering from flood damage. It is designed to help restore your home or business to its condition before the disaster. Most NFIP policies include Increased Cost of Compliance (ICC) coverage, which offers policyholders up to $30,000 to help rebuild substantially damaged buildings, making them more resilient to future floods.
ICC coverage is available to policyholders who live in a Special Flood Hazard Area and whose local floodplain manager has deemed their structure to be substantially damaged. Substantial damage is defined as flood damage where the cost to restore the building to its pre-damage condition is equal to or exceeds 50% of its market value.
Federal disaster assistance should not be viewed as a replacement for flood insurance. FEMA’s Individual Assistance Program usually offers limited compensation and is only accessible when the President formally declares a disaster. Its primary aim is to help make your home or business safe and sanitary. However, federal aid typically does not cover enough for permanent repairs.
Flood insurance is an effective way to recover from flood damage to your home or business. Property owners should visit FEMA’s Map Service Center to assess their flood risk. Reach out to your home insurance agent to find out if they provide flood insurance through FEMA’s Write Your Own (WYO) program or through the private market. Protect yourself from unexpected expenses due to flood damage repairs for your home or business. Don't let costly repairs catch you off guard!