Flooding Insurance: What You Need to Know

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By Rochford Law Posted on October 28, 2021 at 12:07 PM

Did you know that all 50 states in the U.S. are subject to flooding regardless of your geographical location? With that in mind, protect your property against any natural disasters will likely be important to you.

As a home or property owner, you likely have some type of homeowners insurance in place already. If not, it is advised that you do so now. With the proper insurance coverage and protection, you can protect your property and the people inside.

Here’s what you need to know about flooding insurance:

  • Home Insurance: Flooding Prevention & Aftercare 
  • Insurance Requirements 
  • Contact Rochford Law & Real Estate Title

Home Insurance: Flooding Prevention & Aftercare

Whether you live in a floodplain or not, no matter where you live, you can get flood insurance. Flood insurance provides the best protection against financial losses caused by flood events since it enables people to recover more quickly and completely from flood damage. If your property has been damaged by floods, flood insurance can provide the funding to repair it without the need to dip into savings, take on debt, or rely on government assistance that is often insufficient and delayed.

The majority of homeowners and renters’ insurance policies do not cover flood damage, so everyone should buy a flood insurance policy even if they are not required to. Most flood insurance is provided by the federally run National Flood Insurance Program (NFIP), although some private insurers offer coverage as well.

NFIP-insured residential property owners and nonresidential property owners are each able to purchase coverage of up to $250,000. In addition, residential and nonresidential property owners are both able to buy up to $500,000 in building damage and another $500,000 for damage to contents.

For coverage beyond these limits, property owners can purchase extra flood insurance policies from private insurance companies.

For help with your home insurance needs, contact Rochford Law & Real Estate Title today!

Insurance Requirements

Certain homes in Special Flood Hazard Areas are required to have flood insurance. This includes federally backed and federally-regulated lenders as well as those whose mortgages are backed by federal agencies like the Federal Housing Administration, Department of Agriculture, and Department of Veterans Affairs. Additionally, those who receive federal assistance for property acquisition, construction, or repairs may find that flood insurance is also required of them.

Homeowners who are required to carry flood insurance as part of their mortgage must buy coverage before the loan closes and keep it until the mortgage is repaid in full. Coverage is required if the remaining principal balance of the loan is less than the maximum amount available under the NFIP ($250,000 for single family homes), or if the building is insured for the insurable value. Federal disaster assistance may be denied to homeowners who fail to comply with the mandatory purchase requirement.

Despite the fact that flood insurance is not legally required for all properties, it is generally a good idea to have it. In many cases, FEMA maps based on which flood insurance requirements are determined are outdated and do not account for all kinds of floods. The risk of flooding for a home may still be high even if it is not in the SFHA. Further, flood insurance for homes outside the SFHA can be quite affordable as low-cost policies are often offered for properties that have not previously flooded. Home and property owners alike can search their address on Flood Factor to find their property’s flood risk as well as their SFHA zone.

Managed by the Federal Emergency Management Agency, the National Flood Insurance Program (NFIP) is delivered by a network of approximately 60 insurance companies and NFIP Direct.

The damage caused by floodwaters can reach $25,000 with just one inch of flooding. In most cases, homeowners’ insurance does not cover flood damage. In order to protect your most precious financial assets - your home, your business, and your possessions - you should purchase separate flood insurance. This can cover buildings, contents in a building, or both.

Contact Rochford Law & Real Estate Title

A real estate attorney can help mitigate risks on or around your property. Protect your real estate investments with the comprehensive services of Rochford Law & Real Estate Title. We offer title insurance and real estate closing services to safeguard your home for years to come. Don’t leave yourself vulnerable to title hazards, call us today!

Contact Rochford Law & Real Estate Title today!

Topics: Nashville Real Estate, Real Estate Attorney, Real Estate Lawyers