Because flood insurance is not covered by your standard homeowners policy, you will need to consult your insurance agent or mortgage professional to determine if it is required for your property.
If there is the possibility of a chance of flooding, it is wise to purchase a policy that covers the structure and your personal belongings.
Your lender may require flood insurance even if the property is not in a high-risk area, but instead in a moderate- to low-risk area. Claims that come from areas outside of mapped high-risk flood zones account for 20% of all claims. Keep in mind that during the life of the loan the maps may be revised and the property could be designated high-risk. Your lender will notify if the status changes and that you now must purchase flood insurance. With The Newly Mapped procedure, policyholders may purchase coverage at the lower-cost Preferred Risk Policy (PRP) rate for the first 12 months after new maps are drawn up. After the first year, the rate begins its transition to a full-risk rate with annual rate increases of no more than 18 percent each year.
Flood insurance can be purchased from an insurance agent or company under contract with the Federal Insurance Administration (FIA), part of the Federal Emergency Management Agency (FEMA). The local government has to have adopted adequate flood plain management regulations under the National Flood Insurance Program (NFIP) for flood insurance to be available.