Assessing Home Flood Insurance Needs

How to assess flood insurance for your home.

When home owners are insuring their home they need to balance the need for security with the need to cut costs. Before you decide to include or remove flood insurance coverage you need to assess your needs.

Lender Requirement

The first question a home owner needs to ask themselves is if the lender requires flood insurance? If the lender requires it you have to opt for flood insurance coverage when insuring your home. Most mortgage companies only require home owners of properties in flood prone areas to carry flood insurance, so check your mortgage details to find out if you need flood insurance for your home. You probably do not need flood insurance if you live in Mesa, AZ. but if you live alongside the Mississippi River in St. Louis or the Sacramento River in Stockton, CA., it is probably a requirement (for good reason).

Flood Zone

Even if your mortgage lender does not require flood insurance or you have paid your mortgage in full, you might still want to purchase flood insurance for your home. This is because floods can cause extensive damage to the property and are not covered in the standard home owner’s insurance policy. Why do you have to have someone force you to properly protect and insure your home? This is just about contingency planning and something you should have thought about before you moved into this home and area.
To find out if your property lies in a flood zone you can check the FEMA Flood Insurance website FloodSmart.gov. By typing in your street address you can find out the flood risk levels associated with your home and decide whether or not the risks warrants you signing up for flood insurance.
Home owners can also check the online flood maps that show the flood risk for each property. This information too can be used by home owners to assess their need for flood insurance.
However, home owners need to realize that these flood zones and flood level maps are estimates and do not guarantee the absence of flooding in other areas.

Global Warming

Another factor that home owners need to take in to consideration when deciding on flood insurance coverage for their homes is global warming. Global warming and associated climate change have made historical flooding data invalid in many areas. Climate change has resulted in both new areas being flooded and extending the extent of flooding in areas that have traditionally been in the flood zone. Home owners who would like to mitigate the risks associated with flooding should consider signing up for flood insurance even if their property is not in a flood zone.

Economic Climate

Apart from climate change, home owners need to factor in the current economic climate when deciding whether or not to acquire flood insurance for their homes. The budgetary constraints faced by governments and the need to cut government expenses (the federal government is trillions in debt and states such as California, Illinois, and New York are virtually bankrupt) have meant that many of the support systems that agencies earlier offered to home owners are no longer available.
Unless the federal and state governments are willing to offer aid in the case of extensive and unprecedented floods, home owners will have to depend on their own resources to rebuild their homes and lives after a flood. In such situations, flood insurance will help mitigate some of the hardships that a home owner has to endure because of flooding. How long does it take for an agency like FEMA to come through for distressed home owners? Looking at the situation with Hurricane Katrina and Sandy (regions damaged were New Orleans and New Jersey respectively), you can practically be forgotten by the ineptitude of this department. Why depend on the government anyhow if you do not have to? If you live in a flood prone area or even think you do, paying for flood insurance should be on the agenda.