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May 24th, 2013

Know your mortgage: Flood insurance

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Since flood insurance isn’t something we discuss too often here at blog.hsh.com, I wanted to share the following post from our partner blog Zing.

Below is a post by Travis Pelto, first appearing on our partner site the Zing blog at Quicken Loans:

house and floodWhat is flood insurance?

Flood insurance is purchased separate from your mortgage, like any other type of insurance. It covers flood damage, which may seem unnecessary if you don’t live in a flood zone, but floods are the most common natural disaster the United States. It’s one of those “better safe than sorry” scenarios. As we reported in this blog about a year ago, the average claim on flood damage is around $48,000. Just go ahead a scroll through the flood facts page on floodsmart.gov and you’ll find an overwhelming amount of reasons to get flood insurance; like the annual losses from floods was more than $2.9 billion from 2002-2011, or living on new land development increases your chances of flooding dangers.

Do I have to get flood insurance?

The answer is it depends, but you should regardless of requirements because it’s incredibly helpful. If you have a government-backed mortgage, and you live in a coastal region or a high-risk flood zone, you are required to have flood insurance. If you’re not sure if your house is in one of these areas, either talk to a local insurance agent or go to floodsmart.gov and fill out a quick profile to determine this. Despite not being covered by regular homeowners insurance, getting flood insurance is incredibly simple; you can either contact an insurance agent on your own or reach one through the National Flood Insurance Program.

If you don’t live in one of these flooding-prone areas, again, it’s strongly advised that you still get flood insurance. Referring again to the flood facts from floodsmart.gov, floods happen in all 50 states. Construction and sporadic weather are just a few of the constantly changing variables that can produce a flood in your area when you would normally think it’s impossible. I checked my zip code for flooding probabilities just for the heck of it while I was researching this post, and I was honestly shocked when I found out my city was in a flood zone. I live in a flat, urban area and would have never thought my city could have been that place.

Seeing a stained murky ring around the bathtub is enough to make me angry, considering the gross cleaning that will follow; now imagine that with a six inch water stain around the entire first floor of your house. It’s hopefully enough to make flood insurance seem like the important addition that it is, because countless Americans are left thinking “woulda, shoulda, coulda” about it after their house is trashed. If you have any lingering questions on the topic, please ask away below.

Related articles:

Great reasons to refinance
Know your mortgage: Jumbo loans
Mortgage missteps: Changing jobs

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2 Responses to “Know your mortgage: Flood insurance”

  1. Tulsa Mortgage Says: May 25th, 2013 at 2:50 am

    Many borrowers have question regarding flood insurance specially here in Tulsa Oklahoma were there is many properties that are located in a flood plane. This blog is going to be very helpful to them. Thanks

  2. Jason Says: May 27th, 2013 at 11:14 pm

    Great advice Tim. So many home owners end up with issues because they didn’t specifically purchase it and then find out later that their homeowners insurance won’t cover some of the damage; that’s sad.

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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