There’s nothing worse than a major flood, and Hurricane Sandy was an unfortunate wake-up call to many homeowners in our region who didn’t have flood insurance. As you may already know, standard homeowner’s insurance doesn’t cover you in the case of a flood. Standard insurance may cover windows broken from wind in a storm, or rain leaked down from the roof, but it typically will not cover flooding from the ground.
If the home you’re looking to buy is located within a flood zone, you’re going to be required to purchase flood insurance through your mortgage lender. In fact, they can require you to purchase flood insurance even if your home isn’t located in one of FEMA’s flood zones (after all, they have to protect their investment too!). And it’s not just homes located on beaches and rivers that require flood insurance — homes nestled in low-lying areas may also be required. Some buyers choose to purchase flood insurance even when not mandated by their lender.
Many buyers become insured through the National Flood Insurance Program (NFIP) which is a government agency. Some private insurers offer competitive flood insurance policies, too! Your agent and lender will be happy to help explain what type of policy is necessary. If the home you’re purchasing is an existing home (as opposed to new construction), you can also probably learn what the current owner pays in flood insurance.
Learn even more about how insurance works through FEMA’s website.