Do You Need Flood Insurance?
Flooding can occur anywhere and at any time of the year.
Does Homeowners Insurance Cover Flood Damage?
Many people mistakenly believe that homeowners insurance covers flood damage. That is generally not true. In most circumstances, you will only be covered for flood damage if you purchase a separate policy through the National Flood Insurance Program (NFIP). The program is managed by the Federal Emergency Management Agency (FEMA). Most cities and towns participate in the NFIP. You can check online to find out if your community participates. You can also purchase a policy that is sold and administered by a private insurance company through an insurance agent.
The price of flood insurance varies depending on several factors. One is the level of flooding risk in your community. If you live close to a body of water, your rates will be higher than those located in a low-risk area. The cost of the policy will depend on whether you insure just the house or also choose to include its contents in your policy.
When Is It Required?
In some cases, you may be required to purchase flood insurance. If you have a mortgage through a lender that is federally regulated or insured and you live in a high-risk area, your lender will require you to obtain insurance. A lender will probably not require flood insurance if you live in a low-risk area, but some lenders do still require homeowners to purchase coverage.