Your mortgage company may require you to buy flood insurance for your home. The main reason they do this is to comply with the Flood Disaster Protection Act of 1973. The minimum amount of coverage they will require is the lesser of:
- The insurable value of the structure (what it is worth)
- The remaining balance of your loan
- The maximum coverage available from the National Flood Insurance Program (Currently $250,000 for residential homes)
This applies to property that is determined to be in a Special Flood Hazard Area (SFHA), which is an area with a 1% or greater chance of flooding annually. The flood insurance requirement is usually made when you first get a mortgage. However the maps are constantly being revised and your home could be determined to be in a SFHA area when a flood map is changed.
If your home is required to have flood insurance and you don’t have it the lender will probably send you a letter. They will give you a short time to get the insurance and if you don’t they will buy it for you. If they buy it the cost will be very high and the expense will be added to your mortgage payments.
The least expensive way to get flood insurance is from the National Flood Insurance Program (NFIP). You may need to have an Elevation Certificate (EC) to be eligible for NFIP insurance. If you don’t already have one the cost is usually from $200 to $500. In most cases you will save far more than that on your flood insurance.
The best place to start if you want or need flood insurance is to consult with an insurance agent that is experienced with the NFIP.
Texas residents can find information at my Texas flood insurance website. Or you can call my Houston office at 281-537-2700.
Lamb Insurance Agency, (Farmers, Foremost, Pacific and Voyager Insurance) Auto, Home, Life, Flood, and Business Insurance for Texas- Farmers Insurance Houston
or visit our texas mobilehome insurance site at Mobilehome Insurance Texas
Recent Comments