My house was just recently designated by FEMA to be in a 100 year flood zone. Do I need to buy flood insurance?
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Asked February 4, 2016
The answer to your question may come down to whether or not your home is still under a mortgage. Flood insurance is not part of standard home coverage and has to be purchased separately, and it is an expense you can skip if you are both bold and your home is paid for. There is a great deal of risk involved in not having flood insurance in a designated flood zone, and the consequences of not having this special type of home insurance could be financially devastating.
If you do not have a mortgage, the decision to buy flood insurance is entirely up to you. However, flood insurance is the only protection your home will have if such an event happens. Unless you are prepared to completely replace your home and personal property out of pocket, a flood insurance policy is worth the investment.
If you have a mortgage on your home, the lender will probably require you to have flood insurance, even if the danger of a flood is minimal. Since the home has been classified as being in a flood zone, the lender will want to protect their investment. It does not matter to them that you are positive a flood will not happen; they only see that such an event is possible.
Being in a 100 year flood plain does not mean that you are going to be flooded out, but it does mean that it could happen if a severe storm comes your way. Flooding can happen anywhere, and the cost of flood insurance is usually very low. A flood insurance policy would eliminate the worry about a rare event happening, even if you are sure it will not happen. After all, it is worth spending a few hundred dollars in order to avoid spending many thousands to rebuild what could be lost.
Answered February 10, 2016 by Anonymous