Why You Need Flood Insurance
It's Required
Homes and commercial buildings with mortgages from lenders regulated by the federal government ig high risk flood zones are require to carry flood insurance. If you are not in a high risk zone you are not required to carry flood insurance, although it is recommended.
It Covers A Gap
Your homeowners does not cover damage due to flooding, which is why a separate flood insurance policy is required. Even if you aren’t in a high flood risk area it is good to think about flood coverage. After all 25% of flood losses are in low to moderate risk areas.
Climate Change Is Here
Weather patterns are changing and have caused unpredictable floods over the past few years. Do you live near a lake, river, reservoir, ocean, even a creek? you may be at risk. These sources of water flow and storage may not be built for the new weather cycles, putting your home at risk .
The Two Programs
NFIP (National Flood Insurance Program)
The nfip is backed by fema, and until recently has been the only source for flood insurance. Rates were once much lower and affordable. Unfortunately this system has resulted in a huge deficit. Recently we have seen soaring rates and more strict underwriting requirements.
Private Flood Insurance
In response to the skyrocketing rates of the federal program, private companies have entered the marketplace. The carriers can offer cheap flood insurance because they are allowed to choose the homes that they insure. This means that you won’t get stuck subsidizing the premium for people that live in high risk areas.