Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, June 30, 1995                   TAG: 9506300084
SECTION: VIRGINIA                    PAGE: A-1   EDITION: METRO 
SOURCE: JEFF STURGEON STAFF WRITER
DATELINE:                                 LENGTH: Medium

MANY WERE NOT INSURED FOR FLOODING

Scores of affected homeowners wrongly assumed they lived far enough from flood-prone areas to safely forgo the insurance, agents said. They could account for as much as 75 percent of the flood's victims.

A preliminary estimate put the number of damaged homes at 800.

"There are people who are experiencing losses who never in their wildest imagination suggested to themselves that they should acquire flood insurance," said Mac Felts, an agent in Lexington. "They are not located on a river or a stream that probably in their memory - or their parents' memory - has ever posed a problem of this magnitude."

Felts said he received calls from 25 clients with flood damage, about a fourth of whom had flood coverage. Lexington agent Stewart Fleming said a similar percentage of 100 clients who called him are insured against floods.

Buena Vista agent David McCormick said one homeowner dropped flood coverage about six months ago when he paid off his house and his lender no longer required it. McCormick said only several of 15 callers to his office had flood coverage.

The agents said many victims mistakenly believe their basic homeowners insurance policy covers damage from floods.

Flood insurance costs an average of $320 per year nationally for an $85,000 home. It must be purchased separately, through an agent, from the Federal Insurance Administration, an arm of the Federal Emergency Management Agency.

The FIA sells the insurance, under the National Flood Insurance Program, under the belief that private insurance companies lack the resources to administer a flood insurance program. Congress set up the system in 1968.

Flood insurance pays - up to policy limits - for repairing damage caused by high water from a river, ocean or even a backed-up sewer. Virtually all lenders require it before they finance the purchase of property in places prone to flooding.

According to the National Association of Independent Insurers in Des Plaines, Ill., most people don't buy flood policies. If a flood hits, they must make repairs at their own expense unless government assistance becomes available.

During the great Midwest flood of the Mississippi and Missouri rivers in 1993, such assistance was limited to $11,900 grants to low-income households and low-interest loans to others, the association said.

The association recommended that victims call their insurance agents to see if their portfolio contains flood coverage they may not know they have. Certain federal building loans and loan guarantees, and private insurance plans for businesses and mobile homes, carry flood-relief provisions.

The "comprehensive" component of a full automobile policy will ordinarily pay for the repair or replacement of a flood-damaged vehicle.