Ed Pasterick thinks he knows why. Pasterick is a senior adviser with the Mitigation Division of the Federal Emergency Management Agency -- the group charged with managing the government's National Flood Insurance Program. He says that most homeowners "do not believe a flood will ever happen in their neighborhood."

        Those who live along a coastal waterway probably do fear a flood, and the government agrees with them. That is why FEMA has created flood-risk areas rated as low, moderate or high risk. Those along the coast are often listed as high risk, but you may be surprised who is in the medium-risk and low-risk categories.

        To find out where your home ranks, go to www.floodsmart.gov and click on "What's Your Flood Risk?" Even if you find your home is in the low- or medium-risk category, you still need to know that about 25% of the flood claims filed occur in those neighborhoods. Detailed maps of your area can also be purchased at www.fema.gov. Visit the flood-risk site. See the FEMA site.

Mistakes homeowners make

        Pasterick also says that many homeowners do not carry separate flood insurance because they believe they are already covered for floods by their current homeowners policy. The truth is that most homeowners policies only cover wind-blown rain or water damage caused by plumbing malfunctions. Flood insurance is designed to cover devastation caused by storm surge, tidal waves or the overflow of a body of water.

        Many homeowners also mistakenly believe that flood damage will be covered by federal disaster assistance, but these monies normally take the form of loans (not grants) and are only available if the president formally declares a disaster. Less than 10% of all weather emergencies in the U.S. are declared federal disasters.

        Other myths about flood insurance include not being able to get flood insurance if you live in a designated floodplain (not true), and not being able to get flood insurance if your home has been flooded before (also not true).

        Hurricane Katrina certainly qualified for a declared federal disaster. A history of these declarations, or even more minor flooding in your area, can quickly raise the rates of flood insurance for those in that area. The average yearly premium for a flood-insurance policy in the U.S. is currently around $400, but some can be had for as low as $121 in the low-risk areas. Even renters can get a contents-only policy for as low as $39 per year.

Is it right for you?

        So, should you get a flood policy for property? Here are the main considerations:
 

• Location. If you are in a high-risk zone, there is no reason you should not have a policy. Note that even moderate- and low-risk properties should also seriously consider a policy.
• Property value. What is the current value of your property and what would be the cost of rebuilding it, including the foundation of the property? Flood-insurance rules allow policies up to $250,000 for residential and $500,000 for businesses. Excess flood insurance can be purchased from private vendors.
• Liquidity. Would your finances be able to withstand the hit of any uninsured losses? Even those in locations declared a federal disaster area are not offered outright grants initially; they first must apply for subsidized loans that must be paid back.

        It is still too early to determine the extent of losses from Hurricane Katrina. FEMA reports it holds about 85,000 flood policies in New Orleans alone. Last year, the state of Louisiana ranked No. 2 in the number of flood-insurance contracts in place, but 13th in loss payouts. These numbers will almost certainly change after Katrina. (Congress recently beefed up the amount of money FEMA could borrow from the Treasury if needed from $1.5 billion to $3 billion to pay claims.)

        If you decide to join the 4.4 million people who currently have flood-insurance policies, remember that there is a 30-day wait. So, those watching the current hurricanes brewing in the Caribbean would not be able to rush out and get coverage for potential damage that may arrive that quickly. But you would be well prepared for any late-season storms and spring rains.

        FEMA has approved more than 200 companies to write the policies. Since FEMA sets the rates, the only variable left for you to evaluate is which company you prefer to do business with. Most likely your current homeowners insurance company can provide you with a flood-insurance policy -- something many people along the Gulf Coast may wish they had gotten earlier.