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Ensuring Proper Flood Insurance Coverage

January 10, 2014

Homeowners should be aware of the important regulations regarding flood insurance.  Any loan that is federally guaranteed for a residential property located within a Special Flood Hazard Area (SFHA) must have flood insurance coverage.

For homes located within these high-risk areas, there is a 1 in 4 chance of flooding over the duration of a 30-year mortgage.  It is important to be aware of this, as standard homeowners’ insurance policies do not cover losses due to flooding.  If you are unsure as to whether your home is located within a Special Flood Hazard Area, you can take a look at the maps on file with your local town building department.  For a general estimate, you can complete the “One Step Flood Risk Profile” here:

Although flood insurance is required for these high-risk areas, statistically about 20% of flood-related claims come from moderate to low-risk areas.  For this reason, you may wish to secure coverage anyway, especially since it is not included in the regular homeowner’s policy.  Also, certain lenders may necessitate flood insurance, even if it is not federally required.  If you would like further guidance on this matter, contact one of our real estate attorneys at 716-636-7600.