The popularity of federal flood insurance policies in Texas is on the rise, according to the Insurance Council of Texas. ICT reported that Federal Emergency Management Agency (FEMA) records show that the number of flood policies sold in Texas jumped more than 24 percent last year.
In Texas, more than 600,000 federal flood insurance policies are in effect with a total liability exceeding $126 billion. The rapid increase in the number of federal flood insurance policies that have been sold is believed due to losses inflicted by Hurricanes Katrina, Rita and Wilma in 2005.
FEMA paid out $16.4 billion for flood claims associated with these storms. These claims as well as additional flooding in 2006 have put FEMA $17.3 billion in debt. Congress is considering legislation that will erase the debt.
“Flood insurance policies remain one of the smartest buys on the insurance market especially since homeowners insurance policies don’t cover losses from floods,” said Mark Hanna, a spokesman for the Insurance Council of Texas. “I also think consumers are finally realizing that flood waters are a very real threat and a flood policy will give them the total protection they need.”
Statistics provided by FEMA show a home has a 26 percent chance of being damaged by a flood during the course of a 30-year mortgage, compared to a 9 percent chance of fire.
Nationwide, the number of federal flood insurance policies jumped more than 13 percent. Mississippi had one of the largest increases with 61 percent, Louisiana had 26 percent and Florida had a 10 percent increase.
Florida remains the most protected state when it comes to flood insured homes in flood plains. Seventy five percent of Florida homes located in flood plains have flood insurance compared with 38 percent of Texas residences. This compares to Oklahoma with 13 percent and Montana with the lowest number of flood insured homes in flood plains at 6 percent.
Flood insurance is offered through the National Flood Insurance Program, which provides federally backed protection against flood losses. The program has $1 trillion in liability with 5.4 million policies in effect. Flood policies can be purchased from your insurance agent and the policies take effect 30 days after purchase.
Source: Insurance Council of Texas
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