First Time Home Buyer “What is Flood Insurance?”

Flood Insurance

The first time home buyer was surprised to find that flood damage insurance was not part of the standard hazard (homeowners) insurance policy.   The assumption being “insurance is insurance,” and upon purchasing a standard policy all was covered.   Thus the question “What is Flood Insurance”

Flood Insurance is an insurance policy which covers your property for flood damage.  The Flood Disaster Protection Act of 1973 mandated flood insurance to protect buildings located in a FEMA designated high risk flood area if the building has a mortgage held by a federally regulated lender. 

FEMA?  The Federal Emergency Management Agency which determines flood risk ratings based on flood history, rainfall, river flow, tidal-surge data, flood control measures and changes which occurred due to building and development.    FEMA has flood hazard maps showing the degree of flood risk of an area.  It is this designation that determines if flood insurance is mandatory and if so the rates for the area.

Discuss any concerns you have regarding flood insurance with your carrier.  Also keep in mind your mortgage company will keep you up to date on any changes FEMA makes to the flood hazard maps, and will notify you of any change which will affect you.  For further information visit the website of the National Flood Insurance Program at: www.FloodSmart.gov