Flood Insurance. Do I need it?
What is Flood Insurance?
All homes that are identified as being in a flood zone are required by the mortgage lender to have flood insurance. Flood Zones have been determined by the US Government and published on maps for purposes of insurance. Lenders use a "Flood Certification" to determine if the house you are purchasing is in a flood zone.
Banks require flood insurance
Mortgage lenders such as banks require flood insurance for any house determined to be in a flood zone. The lender will require a flood certification. The charge for this certification is passed onto the borrower and ranges from $15 to $25. The cost of the actual flood insurance is paid by the borrower in addition to normal homeowners insurance. The homeowner pays the cost of the actual flood insurance.
No Insurance Required
If you do not have a loan on your home, you do not have to have flood insurance but if you don't you will be at risk for any damage to your home that is caused by rising water. Flooding is one of the major causes of damage to homes in the United States.
Flood insurance is not covered by homeowners insurance
Damage to your home from rising water is not covered by your homeowners insurance policy and must be purchased separately. You can purchase flood insurance from your insurance agent.
Not in a flood zone?
We have seen the affects of climate change in recent years and this has lead to increases in flooding, even in areas that have not seen flooding before. This will grow more acute along coastal area, as polar ice melt begins to raise sea levels. So, flood insurance can be a good idea for anyone living in coastal areas, even if they are not designated as flood zones
You might want to consider flood insurance even if you are not in a flood zone. Nearly 20% of flood insurance claims come from what are considered moderate and low risk areas.
For those who have not experienced a flood in the past, it doesn't mean they won't in the future. Flood risk is based on history, rainfall, river-flow and tidal-surge data, topography, flood-control measures, and changes due to building and development.
National Flood Insurance Program
Visit the National Flood Insurance website for complete details about flood insurance.click here