Flood Insurance Facts

As one of the most common natural disasters, floods are widespread and can cause much more than property damage. For Minnesotans without proper insurance, flooding can cause severe personal and financial losses. Of the roughly 2 million households in Minnesota, only 11,000 buy flood coverage. Misconceptions of cost, who is eligible, what is and what is not covered under standard policies, and where to obtain flood insurance are plentiful. The first step is to know the facts.

• A standard homeowner’s insurance policy does not provide flood coverage.

• You cannot depend on disaster assistance. You only get assistance when the President declares a disaster. Since less than 50 percent of floods are declared disasters, most flood victims are on their own.

• Paying for flood insurance is less expensive than paying back a disaster loan. Most disaster aid comes in the form of loans, which must be paid back. The average loan payment on a $50,000 disaster loan is $240 per month ($2,880 per year) for 30 years compared to a $100,000 flood insurance premium which is about $400 per year ($33 per month).

• Most Minnesotans are eligible for National Flood Insurance Program (NFIP), as 88% of Minnesota communities have opted in to the program.

• Record winter snow melts and spring flooding have created a situation where 40% of flood claims since the 1990’s, have come from outside of high-risk areas. Most in low- to moderate-risk areas are eligible for Preferred Risk Policies, or PRP’s.

• If you live or own property in a high-risk area, you face a one-in-four chance of flooding during a 30-year mortgage. You are often required to pay for flood insurance and have a federally backed mortgage. Under these policies, you can have part of your flood loss avoidance costs covered. Once you pay off your mortgage, you should still continue to purchase flood insurance. Additionally, there are ways to lower the risk of flood or to pay less for flood insurance.

For more information about flood insurance, we encourage you to contact Kayla, our in-house expert, at the AgQuest/MN River Insurance office in Le Sueur, 507-593-0128 or kdornfeld@agquest.net.


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