What you need to know about Flood Insurance.
There’s a misconception that a house located in a 100-year flood plain will flood once every 100 years. In fact, it’s one in which there is a 1% or greater chance of major flooding in any given year.
Thirteen inches of rain fell on Nashville and the surrounding areas over two days in May 2010. The resulting flood killed 21 people and damaged thousands of homes. What is sometimes called “The Great Flood of 2010,” is still having an impact on the housing market and more people than ever are considering buying flood insurance, even if their home is not located in a Special Flood Hazard Area (sometime referred to in short-hand as a “flood zone”). Here are some basics on flood insurance.
You don’t have to live near water to be victim of flooding. It can occur from melting snow, storms, inadequate drainage systems and broken water mains.
A property located in a Special Flood Hazard Area has a 1 in 4 percent chance of flooding during the lifetime of a 30-year mortgage and flooding is not covered on a homeowner’s policy. That’s why your lender is going to require you to buy a flood policy if your property is located in a Special Flood Hazard Area. If you’re not in a Flood Zone, then your lender will not require Flood Insurance but the policy is very inexpensive, as low as $129, per year.
Why not rely on Federal disaster assistance if your house is flooded? First of all, Federal disaster assistance is only available if the President declares a state of disaster. Second, it is a loan that has to be repaid with interest. Flood insurance pays even if a state of disaster is not declared and does not have to be repaid.
There is no waiting period for a flood policy that is purchased in conjunction with a home purchase or loan refinance.
Visit www.floodsmart.gov for more information about flood insurance.
Go to http://msc.fema.gov for copies of flood maps.
Real estate professionals visit www.Realtors.org for information about how flooding can impact your work.
Thanks to Paul Moye of Benchmark Realty for providing today’s information. You can reach out to him at firstname.lastname@example.org.