WASHINGTON – When Hurricanes Charley, Frances, Ivan and Jeanne roared through Florida last year, they left behind more than a trail of death and damage. They may also have put to rest any notion that flooding "can't happen here." Lena Thompson, a flood insurance program analyst with the Federal Emergency Management Agency, and others have been preaching the gospel of flood insurance for years. Have they succeeded? "Looking at our policy database, we show that in Florida we had roughly 70% (flood insurance) saturation of the structures in high-risk areas – areas where flood insurance is required. That means approximately 30% still were not covered." Mortgage lenders as well as homeowners need to be aware how important it is that flood insurance is purchased and maintained, she continues. In some cases, when a mortgage loan is sold the new mortgage holder may not be as alert as the original lender to following up on yearly flood insurance renewal. One way to make sure policies are maintained is to escrow the premiums whenever possible. "There's a new awareness that floods can and do happen," Thompson says. "The better way to recover is to have adequate flood insurance in place. I can't stress enough the importance to mortgage lenders of making sure those policies are in place and stay in place." In addition, Thompson agrees there are still some homeowners who don't understand their ordinary homeowners policy does not cover flooding. "That's where your lender comes in and can advise those property owners that a flood policy is needed in addition to homeowners insurance. It's a message we have to keep putting out," she says. Thompson does offer a bit of good news. In those cases where flood insurance was in effect in Florida, she has seen no cases where coverage was inadequate. It appears when people do take out flood insurance, especially in flood-prone areas such as coastal Florida, they accept the idea a flood can happen and purchase realistic protection. However, there are still people who decry the flood maps and insist they are not in a high-risk area. Most veteran disaster workers and reporters covering floods hear time and time again, "Why, I've been here 30 years and I've never seen anything like this." "I do hear that," Thompson confirms. "I get written correspondence from people who say, `I've lived here all my life and my father lived here. There was never any flooding.' Then there's the property owner who says, `I can't see any water. I'm up on a hill. Why do I have to have flood insurance.' However, the fact is because there has been no flooding doesn't mean flooding won't occur." For one thing, the landscape in many areas is changing. Florida is a good example. As homes, stores and offices are built at a rapid clip, grassland that used to be able to absorb water is now paved over. Water may run straight to areas it never used to reach. That's one reason flood maps are being updated region by region. Most large lenders who have contracts with flood zone determination companies can contact them to find out when new maps will be available for their region. FEMA is also updating its mandatory flood insurance guidelines booklet which was last rewritten in September 1999. Are lenders, for their part, keeping the documentation needed in loan portfolios when flood insurance is mandated? "While FEMA does administer the National Flood Insurance Program, we're not a regulatory agency for lending institutions. But I have seen where have been civil money penalty against lending institutions for not complying with the Flood Insurance Reform Act," Thompson answers. -

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