Flood insurance policyholders in Mississippi rebuilding in the wake of Hurricane Katrina may be eligible for up to $30,000 to help cover the cost of bringing their property into compliance with local building codes.
Policies issued since June 1, 1997 as part of the National Flood Insurance Program (NFIP) have an Increased Cost of Compliance (ICC) rider. This rider is for structures located within the floodplain, also known as Special Flood Hazard Areas (SPHA), which have sustained substantial or repetitive flood damage.
The U.S. Department of Homeland Security’s Federal Emergency Management Agency (FEMA), which manages the NFIP, makes these funds available to policyholders who build higher and stronger in order to reduce the risk of future flood damage.
Flooding is the most costly natural disaster in Mississippi (and in the U.S.). The state has more than 5.2 million miles of floodplain (one of every six acres) and about 25 percent of all flood damage occurs outside of mapped floodplains.
Yet, approximately only one out of 15 Mississippi homeowners reportedly have purchased flood insurance, which in Mississippi averages only $450 per year.
Unfortunately, many home and business owners don’t discover that their homeowner’s insurance policies do not cover flood damage until after a flood has occurred. FEMA hopes that the ICC coverage will help encourage more property owners without flood insurance to buy now.
In order to buy flood insurance the property must be located in a community participating in the NFIP. To participate, a community must adopt and enforce sound floodplain management. This primarily means that participating communities require building standards to exceed the base flood elevations adopted by that community.
Currently, 274 Mississippi communities participate in the NFIP.
Flood damage is reportedly reduced by nearly $1 billion a year through communities implementing sound floodplain management. The claims from the 2005 hurricane season are projected to exceed $23 billion nationwide.
Property owners living in participating NFIP communities can purchase flood insurance through most major insurance carriers who sell homeowner’s or business policies. There is a 30-day waiting period for all policies to take effect.
For more information, contact the National Flood Insurance Program by calling 1-800-427-4661 or (TTY) 1-800-427-5593 for the speech- or hearing-impaired.
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