If you live in an area that is at risk for flooding, chances are that you will need a flood insurance policy. This is often required with mortgage lenders if you still have money to pay on the mortgage, but can also give you peace of mind as a homeowner. Here are a few things to know about flood insurance.
Flood Insurance Is Provided By The Government
Many people assume that the flood insurance they purchase is from their local insurance agency. However, it may surprise you to learn that the insurance is actually provided by the government. Insurance is provided through FEMA's National Flood Insurance Program. It is important to know this so that you understand how flood insurance works if you ever need to file a claim.
The insurance company handles the assessment of the damage and interprets the guidelines provided by FEMA. The claim is then submitted to FEMA to reimburse you for the damage.
Flood Insurance Can Be Purchased By Homeowners That Are Low Risk
While flood insurance is required by those homeowners that live in an area that is at risk for flooding, know that you can always buy flood insurance for your home. Flood insurance covers any instance where water gets into your home from the outside. Even if you do not live by a river, lake, or another large body of water, there are always ways that water can get inside.
For example, you may have a very strong rainstorm where the water level rises from the street and enters your home through a window well. The only way to have this type of damage covered by insurance is to have flood insurance.
Expect to pay lower premiums due to not living in a high-risk area, which can make flood insurance more affordable.
Flood Zones Can Be Looked Up Before You Purchase A Home
If you are worried about needing to purchase flood insurance for your home, be sure to look up which areas are more at risk for flooding in your area. FEMA provides maps that identify areas as flood zones, which will tell you if real estate in that area will require flood insurance when you have a mortgage. You may be surprised at what parts of your town are at risk, and then try to avoid a home in that area.
For more information about flood insurance, be sure to work with a local insurance agent in your area that sells this insurance product.
After we purchased our first home, we realized that it might be a good idea to evaluate our insurance coverage. Although we had purchased homeowners insurance before, we had never owned a policy as large as the one we would need for our new place. Also, our new home had a trampoline and a swimming pool, which made us worried about liability. To iron out the details, I decided to meet with our insurance agent. We talked about things like monthly premiums, coverage limits, and deductibles, and it was incredible to learn more about the terminology. This blog is designed to help you with the same types of questions.