How to know if you need flood insurance
Anyone who purchases a homeowners insurance policy will most likely consider purchasing flood insurance at some point. But how do you know if you really need it? Here are a few tips for making that determination and assessing your risk for a flood on your own.
Does your lender require it?
First and foremost, you may not have an option about purchasing flood insurance if you have a mortgage on your home and your lender requires you to carry flood coverage. Since flood damage is not covered under a standard homeowners policy, your lender may require you to carry a separate flood insurance policy in order to protect their investment in your home.
A mortgage company does not typically require all of their homeowners to carry flood insurance- just those that are in a high-risk flood zone (more on determining your flood zone later).
If your home is located in a low-risk flood zone you might be able to get a mortgage without purchasing flood insurance.
What is your flood zone?
So, if your lender doesn’t require flood coverage that obviously doesn’t mean you are safe from flood risk completely. Every home is at some type of risk for flood damage. So, how do you know what type of risk zone your home is in?
Your best bet is to visit the FEMA Flood Insurance website FloodSmart.gov. They have a flood risk profile tool where you can type in your address and assess the flood risk of your home. The results page will also show average flood insurance premiums in your area.
Don’t want to take their word for it? FEMA also offers online flood maps which are used to determine flood risk for each property. You can visit the FEMA flood map for your property to see exactly where the flood zone lines are drawn in your neighborhood.
These maps are only estimates of your home’s flood risk and should not be taken too literally. Many homes that are in “low risk” zones may experience a significant flood at some point- so it is always a good idea to purchase some flood coverage if you want to be completely protected.