If you are owner of a residential property and already bought your homeowners insurance, then you need to know that damage due to flood is not covered under standard renters and homeowners insurance policies. You need to buy separate flood coverage either from the NFIP (National Flood Insurance Program) or from a few reliable private insurers. According to the FEMA, after the Hurricane Harvey of January 2018, more than 91,000 NFIP policyholders claimed for losses and FEMA has paid more than $7.6 billions to them.

On the basis of NFIP payouts toward flood insurance, Hurricane Katrina of August 2005 ranks the first as the most significant US flood event, where the amount paid is $16,323 million. The two recent floods that struck US and in terms of NFIP payout are Hurricane Mathew of 2017 (that struck Florida, North Carolina, Virginia, South Carolina, Georgia) ranking eighth and The Louisiana floods of 2016. The figures are preliminary as the claims are still under process.

A poll conducted in 2016 by the Insurance Information Institute found that only a 12% of the American homeowners carry a flood insurance coverage. The officials of Houston area are already planning to put up at least two dozen billboards, encouraging the residents to purchase flood insurance. The recent Hurricane Harvey has compelled the officials to take up this measure, in order to ensure that the residents do not face financial crisis, if any such event hits again. The Harris County Flood Control District gives an estimate of amount 80% of the nation’s 1.4 million buildings that lack flood insurance coverage, when the storm had devastated the region.

According to the report by the Houston Chronicle, the Commissioners Court voted to seek at least $75,000 in federal grant funds for the billboards to be put up around the town. The district provided commissioners instances of proposed billboard messages, disproving all myths about flood insurance. One such instance of such a myth is a belief that flood season lasts only from June to November, but in reality the flood-season lasts all the year round. Even the residential properties located outside flood plains also need to purchase flood insurance. This huge move is a part of a larger effort undertaken by the Federal Emergency Management Agency (FEMA), with an objective to double the purchase of flood insurance policies over the coming five years.

If we delve into the history of NFIP, when it was created by the Congress in 1968, due to the necessity of response toward the rising cost of tax-payer-funded disaster relied for the flood victims and the rising number and amount of damage caused by this natural disaster. The NFIP supports federally backed flood insurance polices available in communities that agree to enforce and adopt the floodplain management ordinances, in order to decrease the future flood damage. The NFIP is self-funding for the average historical loss year. This implies that unless there is again a widespread disaster, the flood insurance claims and operating expenses would be financed through the collected premiums.