Are you about to purchase property? It is a great deal and the closest thing to your dream home, but… there is one detail that really concerns you – it is located in a flood zone.
Buying a home in a flood zone may seem like a risky proposition, but if you know what to do it shouldn’t be a problem. Furthermore, if it does become a problem you will be prepared. Keep reading for what to do to protect yourself and your family.
Types of Flood Zones
Your first priority – gain some knowledge about the area the property is located in. The Federal Emergency Management Agency has maps online you can look at to find out details about the flood zoning risks.
The National Flood Insurance Program (NFIP) is responsible for informing the public and insurance lenders of the risks of flooding across the United States. The Army Corps of Engineers was charged with the task in 1973 and they created flood zones based on how likely the area is to flood.
The flood zones are broken into three categories:
- Zone X (low-risk)
- Zone AE (high risk)
- Zone VE (high-risk coastal area)
If your property is in a flood zone type AE or VE, mortgage lenders are, by federal law, required to force homeowners to secure flood insurance before purchasing the property.
Flood insurance policy costs vary widely from area to area and agency to agency. The federal government holds the most flood insurance policies, but these government programs are imperfect. Many are paying significantly above industry rates for FEMA and NFIP flood policies.
Home flooding tends to be a financial disaster, with some $155 billion in property damage over the last ten years. There is an estimated 4.3 million properties in the US that are at substantial risk of flooding Even if you are located in a minimal risk flood zone, chances are insurance could one day be needed.
The risks of flooding in some areas are high enough to make banks nervous about their investment. Most lenders will insist on flood insurance which can be quite expensive. It is also important to realize most homeowners insurance doesn’t include flooding in the policy.
Don’t be caught without flood insurance, and lose everything to mother nature one day. Check out reputable insurance agencies that specialize in flood insurance like AE flood insurance. Flood protection you buy out responsible homeownership, after all, what is more important than your home?
Buying a Home in a Flood Zone
We hope you feel a little better now knowing that buying a home in a flood zone isn’t as bad as it sounds. First look to fully understand the risks by researching the flood zone and get flood insurance.
Know how to handle a flash flood emergency and keep an eye on the sky. For more advice, keep reading our blog.