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The Benefits of Flood Insurance vs Disaster Assistance

Floods threaten homes from coast to coast - and they can happen anytime, anywhere and without warning. The damage from a flood is not covered under a standard homeowners policy. Before you experience the disaster of flooding, the National Association of Insurance Commissioners (NAIC) suggests all homeowners and renters review their flood insurance needs.

Listed below are several differences between Flood Insurance and Disaster Assistance. If you have any questions regarding your current flood insurance policy or just have some general questions, please call me. I will be glad to assist you.

Flood Insurance:

  • You are in control. Flood insurance claims are paid even if a disaster is not declared by the President.
  • Between 20 and 25 percent of all claims paid by the NFIP are outside of Special Flood Hazard Areas.
  • There is no payback requirement.
  • Flood insurance policies are continuous, and are not non-renewed or cancelled for repeat losses.
  • Flood insurance reimburses you for all covered building losses up to $250,000 and $500,000 for
    businesses. Contents coverage is also available up to $100,000 for homeowners and $500,000 for
  • The average cost of a flood insurance policy is a little more than $500 annually. The cost of a
    preferred risk policy is less than $200 annually, depending on where you live.

Disaster Assistance:

  • Most forms of federal disaster assistance require a Presidential declaration.
  • Federal disaster assistance declarations are not awarded in all flooding incidents.
  • The most typical form of disaster assistance is a loan that must be repaid with interest.
  • The duration of a Small Business Administration (SBA) disaster home loan could extend to 30 years.
  • The average Individuals and Households Program award for Presidential disaster declarations related to flooding in 2008 was less than $4,000.
  • Repayment on a $50,000 SBA disaster home loan is $240 a month or $2,880 annually at 4% interest.

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Michael McKay Insurance Agency

12603 SW Freeway, Suite 240 | Stafford, Texas 77477
281.240.1166 |

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