Flood Insurance

Flood Insurance

I’ve often wondered about my hometown, Springville UT, since I’ve heard of a flood that happened decades ago when hobble creek (a creek which runs through the middle of the town) overflowed and flooded most of the town.  If I owned a home in Springville, would I be required to purchase flood insurance?  I have a lot of questions about flood insurance and I don’t think the answers are always as straight forward as they seem.  For example, who are the people determining whether I am required to have flood insurance or not?  What kinds of flood insurances are available, and what do they cover?  Is it reasonable to have flood insurance when I’m not required to purchase it but would like to have it just in case?  Is there a way to get around needing to purchase flood insurance if I am required to have it?

Firstly, I found out that a program in the government calledNFIP or the National Flood Insurance Program is the agency administered by FEMA or the Federal Emergency Management Agency. FEMA is the agency which actually determines what constitutes a flood zone area.  Lenders will generally take the recommendation from FEMA when determining if flood insurance will be required on a property being financed.  FEMAworks with a lot of private insurance companies, offering flood insurance to homeowners.  Communities join this agency and agree to enforce reasonable floodplain management standards, in order to qualify for flood insurance from FEMA.

Also, there are two different types of flood zone insurance that exist; building coverage and contents coverage.  In order to review exactly what is covered by both types of insurance, here’s a great list provided by this government website: http://www.floodsmart.gov/floodsmart/pages/about/coverage_from_nfip.jsp

It is interesting to note that neither type of coverage will coverthe land the property sits on.  I punched in my address into a helpful calculator provided on the site mentionopens IMAGE file ed above and found out that I live in a ‘moderate-to-low risk area’ or a ‘non-special flood hazard area’.  It is recommended that I own flood insurance, but it is not required.

Is it worth it?

Some people may have a problem with paying for any type ofinsurance.  I understand that feeling.  One can certainly feel after a while of paying for insurance, but never having needed to use it, that you’ve wasted your money.  Regardless of which end of the spectrum you land on, whether you’re the type of person who chooses to be extra cautious and wants flood insurance whether it is needed or not, or if you’re the type of person who hates to pay for it, flood insurance protects you from what would otherwise be a real life disaster.  Call into Box Home loans today regarding your home purchase or refinance and to ask about flood insurance and if it will be required on your property.  Our friendly representatives can put you at ease about all of your questions and concerns regarding your loan and direct you to the information you need about protecting your family and property from the disaster of a flood.

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