Treading Water: Is Flood Insurance Required? Where and Why?


Flood Insurance

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Floods are one of the most devastating disasters that can strike almost anywhere and at any time.

You might be surprised to learn that most traditional homeowner’s insurance does not include flood coverage, which means you could be out thousands of dollars if you’re a victim of flooding.

Whether you own or rent, is flood insurance required and if so, where and why? Read on to learn more about this special insurance and find out if you need it to keep your home and belongings covered.

FEMA’s National Flood Insurance Program

If you live in a designated flood zone, you will probably have to participate in the National Flood Insurance Program. This form of insurance is completely separate from your homeowner’s policy.

FEMA has a map available to help you determine if you’re in a flood plain or flood zone. When you enter your address, the map will indicate if you’re at risk.

If you’re deemed to be in a flood-risk area, you will likely need to enroll in the program. Some mortgage lenders require you to purchase this insurance before you can close on a new home.

Congress has mandated that federally regulated or insured lenders must require this type of flood insurance if the home is located in a high-risk area. However, even if your address isn’t currently on the risk map, your lender may still tell you that this insurance is required.

Even if it hasn’t flooded in years, having this kind of coverage is absolutely crucial if you live in an area that has a risk of flooding. These types of disasters can occur at any time, and it’s usually when you least expect it.

So when you ask is flood insurance required, the answer is yes if you live in a flood zone or flood-prone area. And while it might cost you more money each month, it’s good to have peace of mind and the protection you need if your neighborhood or home does flood.

Where Does it Flood, and What Are the Risks?

If you live anywhere near a body of water, you’re much more likely to deal with flooding at some point. But even those counties and cities that aren’t right on the water could still be considered a high-risk area.

For areas where waters continue to rise each year, the risk increases as time passes. For example, if you live in a low-lying area that’s below sea level, your city streets could flood when it rains or there’s a major storm like a hurricane.

FEMA is constantly monitoring flood activity throughout the country. Their data visualization tool lets you see historical flood risk based on your area. It also explains more about the potential cost of damage that could be incurred from flooding.

When floodwaters breach your home, it can wreak havoc on your house’s structure and all of your personal belongings. Without flood insurance, you may not be able to get reimbursement.

Floods can not only cause serious damage to structures, but they can also cause drowning and death. Pay close attention to your area and determine if you are historically at risk.

When you’re better prepared, you can get the coverage you need and know how to deal with floods if they happen. Some of the most common areas where floods can happen to you include property near beaches, lakes, streams, and even low-lying cities. Houston, Texas is a prime example of a part of the country where people never expected flooding to take place.

Other causes of flooding include places where there has been a fire, causing landslides and creating a vulnerable area where water can rush in. Snow thaw during the spring and even heavy rains can also contribute to flooding. It’s not just major events like hurricanes that can cause your property to flood.

Choosing the Best Insurance

Just like other forms of insurance, flood insurance has varying deductibles and levels of coverage. You might be tempted to choose the cheapest option, but it could come back to haunt you later.

Over time, you might consider canceling your flood insurance policy if your home has never flooded. This false sense of security can backfire if you cancel and then end up with a flood later on.

Also, some lenders and mortgage holders will not allow you to cancel the policy once it’s activated. Read this post to learn more about how to find the best flood insurance for your needs and your home.

In the past, the only type of flood insurance available was government-backed insurance. Today, you can choose from several private companies that also offer this important coverage.

Find out if this insurance is required where you live, then compare prices and coverages to select the policy that will give you the peace of mind you need. Remember that you may have to have flood insurance if you live in a specific area, so do your homework to get the best deal.

So, Is Flood Insurance Required?

Now that you’ve asked is flood insurance required for your home, you can determine whether or not you live in a high-risk area. Use the FEMA resources available to help you make a smart decision when it comes to choosing where you want to live.

As long as you’re aware of the risks and enroll in decent coverage, you can rest assured that you and your family will be able to weather the storm.

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