FLOOD INSURANCE; Do I need it?

This year Mother Nature has definitely not been a good sport in regards to the amount of water many lakes, towns and cities have seen.  With a record breaking year for high water levels, many people have been left in a position of having had or still have water somewhere in the property, leaving many asking should I have had flood insurance and how do I know if this is something I should look into for future protection.

 

The first things to understand is that most standard homeowners insurance does not cover flooding.  In 1968, Congress created the National Flood Insurance Program (NFIP) to help provide means for property owners to protect themselves.  The NFIP offers flood insurance for homeowners, renters and business owners if their community participates in the program.  You can see if your community participates in the NFIP program at THE NFIP PARTNERSHIP.

 

If your property is located in a high risk area of flooding, Congress mandates insured lenders to require flood insurance on that property.  This will be included in your closing package on the home you are going to purchase.  A high risk area is defined as a property located in an area with a chance of flooding 1 in 4 chance of flooding in a 30 year period.  Residents in a moderate to low risk area with a mortgage from a federally regulated or insured lender are typically not required to have flood insurance.  Statistics show that nearly 25% of flood claims filed, are done so by those outside of mapped high-risk zones and receive nearly one-third of Federal Disaster Assistance for flooding.   Disaster assistance when available, is not a free hand out.  People that receive this assistance need to understand that this is typically a loan you must repay with interest.  If you are working with a federally insured lender, they can require flood insurance be purchased on a home, even if it is not federally required.

 

                                           

                                                             (flooding in Clarksville photo)

 

Understanding the area you live in is the best way to determine if you are or could eventually be located in a flood zone.  Changing weather patterns, erosion, and development can affect floodplain boundaries.  FEMA is currently working to update and modernize the nations FLOOD INSURANCE RATE MAPS (FIRMS).  These maps will show a community depiction of flood hazards and properties located within those flood zones. 

Being prepared for a flood can not only help keep your family safe, it can also help minimize potential flood damage and accelerate recovery efforts.  There are many safeguards one can take to protect your home and possessions.  The first and most important thing to do would be to develop a family plan.  This plan should include photos of every room and close up photos of items that are valuable.  These should be kept in a place off site so if the home floods, you still have access to these photos for insurance and replacement needs.  Next be sure to have a disaster supply kit, safe place to go to reunite with loved ones and a pet plan.  More can be found in detail on these plans at www.gloodsmart.gov/floodsmart/pages/preperation_recovery/pr_overview.jsp.

Jan Nygren

Jan Nygren

Real Estate Agent - Guiding Way LLC
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