What Is Flood Insurance?
Posted by Taylor Patrick on Mon, Jan 24, 2011 @ 09:28 AM
Why Is Flood Insurance Important?
Floods have caused 7.1 billion dollars worth of damage in the U.S. in the past 10 years. Despite the fact that Homeowners Insurance Policies do not provide coverage for flood damage, it is estimated that only 20% of American homes at risk of flood damage actually carry Flood Insurance.
Is Flood Insurance Mandatory?
All mortgagee companies will require as part of the contract that Home Insurance be purchased for the property, but sometimes Flood Insurance in Massachusetts-Massachusetts Flood Insurance Quote is made mandatory by mortgage lenders as well.
If the property is not in a high-risk area, federal law does not require flood insurance. However, a lender can still require it. It is also recommended since historically about one-in-four flood claims come from these moderate-to-low risk areas. Note that if during the life of the loan the maps are revised and the property is now in the high-risk area, your lender will notify you that you must purchase flood insurance.
What Causes A Flood?
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Hurricanes and Tropical Storms
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Nor'Easters
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Heavy rains and winter storms
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Construction and new development
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Overburdened drainage systems
Why You Need It
There is a 26% chance of experiencing a flood during a 30 year mortgage, compared to a 4% chance of fire. You specifically need flood insurance if you wish to protect your home or business in the event of a flood! Even if you are not in a high risk zone, a quater of all flood losses occur in low to moderate risk zones.
Curious how expensive it is?
