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Do I need Home Owners Flood Insurance?

by Anita Johnston on 10/02/2010 07:50 PM

The good news is that if you live in an area that is prone to flooding, the lending company will require you to purchase flood insurance. Banks realize that if you purchase a home in what is known as the 100-year flood plains, that you will have a chance that this 100-year span will occur during the time you are paying on the loan. They want to protect their assets, so you will need to purchase flood insurance. On the other hand, look at Nashville, Tennessee, which is not prone to flooding, what happens in this case? This does not mean, as you can see from the news, that a flood will never happen.

Some of the areas may be on the map as 500-year flood plains, meaning a flood only occurs every 500 years unlike the 100-year flood plains in which a flood occurs every 100 years. The sad news as in the case of Nashville, which is in the 500-year flood plain, is that a devastating flood occurred and the time limit of 500 years was not even close. In areas where the homes are located in the 500-year flood plains, most banks and even insurance companies do not mention flood insurance to their clients. In Nashville, the sad news is that homeowners even living the life of luxury on the river where told by their builders, lending company, and insurance agent that they were not in a flood plain and had nothing to worry about at all. At the time of the flood, only 4,100 families had flood insurance, which did not include many of the homes set along the river.

The best way to decide if you need flood insurance is not talking with anyone but by during some research. Check to see if you are in flood plain. No matter if you are in the 100-year flood plain or 500-year flood plain, you should consider flood insurance.

If you live nearby a lake, a river, or even a creek, you may also want to consider flood insurance. No one can say that these bodies of water will never overflow and send the water gushing toward your home. The option of flood insurance should be one that you make after doing some research on the area and deciding if it is worth the risk of not having flood insurance.

Last updated on 10/02/2010 07:54 PM