Living in Scottsdale, AZ is not always all dry heat and sunshine. With summer in full bloom, Maricopa County is already in the midst of its annual monsoon season. Both winter and summer are Scottsdale’s rainy seasons, with the summer storms likely to become extremely intense.
According to the Flood Control District of Maricopa County, the combination of the summer heat with the moisture that gets pushed in from the Gulf of Mexico, the Gulf of California and the Pacific Ocean by the south and southeast winds creates an atmosphere of horrendous storms. What results are high winds, dust and torrential downpours that can cause severe thunderstorms with flash flooding.
Flash flooding is the leading cause of flood damage to homes and buildings but what’s important to understand is that homeowners insurance does not cover flood damage. The reason for this is that flood damage is unpredictable and generally very expensive. However, according to a recent article in the Phoenix Business Journal,
…owners of properties located within high-risk flood zones with federally-backed mortgages are often required to have flood insurance.
So, how is it that flood insurance is required but not provided? It is certainly possible to purchase flood insurance in Arizona, but many people who are unable to afford extra insurance on their own opt to get their flood insurance through the National Flood Insurance Program (NFIP). The biggest issue with the NFIP is that it is government funded which means that the funds aren’t always guaranteed to be there.
Currently, there are around 18,000 residential and property owners in Maricopa County who have flood insurance with the NFIP for their homes and businesses. For the last six years, Congress would only sign off on short-term authorizations, leaving its Maricopa County users unsure if their policies would lapse or even continue. Good news to those participants is that Congress did just recently pass a bill to continue coverage for the next five years, alleviating some of those short-term worries. Of course, with this longer-term reliance, there are some new stipulations.
The new legislation would raise the cap on premium hikes to 20 percent a year from 10 percent. It would also require a yearly rate hike of 25 percent for premiums of specific properties, including vacation homes and homes with repeated claims. The bill would also set minimum deductibles ranging from $1,000 to $2,000. These changes would make coverage more costly for property owners.
These stipulations may seem costly to those who take part in the NFIP, but considering that insurance claims from flooding average at about $34,000 for residential homes and over $85,000 for commercial businesses, the increased costs should seem a small price to pay.
So, as monsoon season takes its course in Maricopa County, those who get flood insurance through the NFIP may have to pay a little more, but they can rest assured that they are covered for at least the next five years.