Flood insurance is available to residents of communities that have agreed to adopt and enforce sound floodplain management practices. Nearly all Kentucky's counties have done so. Lending institutions that are federally regulated or insured must see evidence of NFIP coverage before they grant secured financing. Protection against being uninsured in the event of a flood. Standard homeowner's insurance policies do not compensate for flood damage.
Flood insurance is cost-effective.
Most flood victims who apply for assistance from FEMA to repair their homes and businesses receive it in the form of low-interest loans administered by the U.S. Small Business Administration. Premiums for flood insurance are far less than the payments for a disaster loan. Flood insurance covers losses even if the flood is not declared a disaster. Reduced risk of flooding. Buildings substantially damaged by flood, if rebuilt to NFIP new construction standards, have less risk of damage from flooding and are eligible for NFIP coverage at a reduced rate.