Necessity

Myth #4: “The government will bail me out.”

Let your client know that in 2017, the average flood insurance claim was more than $90,000, while the average payout from government provided disaster assistance was only around $5,000.

Also, disaster assistance isn’t guaranteed. Federal disaster assistance is only available for a Presidentially declared disaster. And even then, there are eligibility requirements potential recipients have to meet in order to qualify for assistance.

For those who qualify, disaster assistance typically comes in two forms:

• A U.S. Small Business Administration loan, which must be paid back with interest, or
• A FEMA disaster grant, which is about $5,000 on average per household

This is also a good opportunity to educate your client on their insurance options. The average flood insurance premium costs around $890 a year. A flood insurance policy can provide up to $250,000 in building coverage and $100,000 in personal property coverage on a one- to four-family residence. If your client is in a moderate- to low-risk area, they may be eligible for a Preferred Risk Policy (PRP) for as low as $325 a year!