When you live on an island, flooding is always a risk. Unfortunately, standard homeowners insurance does not cover flood damage. For that, you need a separate flood insurance policy. The National Flood Insurance Program in Hawaii provides critical coverage to thousands of homeowners. This coverage can help protect the entire community as well as the individual property owner.
The National Flood Insurance Program (NFIP) is a federal program that provides flood insurance to property owners.
Not all types of water damage are categorized as flooding. NFIP defines a flood as an excess of water on land that is normally dry, affecting two or more acres of land or at least two properties. If a pipe bursts and fills your home with water, your NFIP policy won’t cover the damage, but your homeowners insurance policy should. Coverage for sewer backups is a little more complicated: the NFIP will only cover the damage if the sewer backup is a direct result of flooding. You can add a sewer backup endorsement to your homeowners insurance policy to cover sewer backups unconnected to floods.
When a flood occurs, NFIP policies cover direct physical losses to the building structure and the contents, up to the policy limits.
- Building coverage protects things like foundation walls, detached garages, permanently-installed carpeting and cabinets, electrical and plumbing systems, and built-in appliances.
- Contents coverage protects things like clothes, furniture, electronics and other personal belongings, curtains, washers and dryers, portable and window air conditioners, and valuable items, such as original artwork.
NFIP Coverage in Hawaii
To buy an NFIP policy, your community must participate in the NFIP. FEMA says more than 24,000 communities participate, including Hawaii County, Honolulu County, Kauai County, and Maui County.
According to FEMA, 61,400 NFIP policies are in force in Hawaii. Although this means a considerable number of properties have the flood protection they need, it also means approximately 400,000 properties do not have coverage under an NFIP policy.
How NFIP Protects Communities
FEMA says just an inch of water can cause $25,000 of damage to a home.
Over the last 10 years, the average NFIP claim payout in Hawaii has been $42,300. For property owners who have coverage, claim payouts like these can be the key to returning to normal after a flood.
However, flood insurance doesn’t just help the individual homeowner. Floods are typically largescale events that may impact hundreds or even thousands of properties at once. As a result, floods can devastate whole communities.
When Hurricane Harvey hit Texas in 2017, many homeowners were unprepared. According to Click 2 Houston, the hurricane flooded more than 300,000 structures and caused approximately $125 billion in damages. USA Today says 80% of homeowners lacked flood insurance. Uninsured homeowners could apply for federal disaster relief benefits, but those are loans homeowners must pay back – and some people may be unable to take on the debt.
Flood insurance helps people rebuild without taking on debt. Communities with high take-up rates are better positioned to recover.
Securing Flood Insurance for Your Home
If you have a mortgage, your lender may require you to maintain flood insurance. Even if you are not required to buy flood insurance, coverage can be a smart move. In addition to the National Flood Insurance Program in Hawaii, you can secure coverage from private flood insurance carriers. An insurance agent can help you review your flood insurance needs.