What You Should Know About FLOOD INSURANCE

Why Should You Get Flood Insurance in Granbury?

In the United States, the average price of flood insurance, nation-wide, is around $600 per year. There are major differences in those prices depending on the state and flood zone in which you live. And there are even certain areas and flood plains where, in order to get a mortgage, you are likely going to be required to purchase flood insurance.

Flood Insurance for a Mortgage

Many areas within Texas are Flood Zone A.  Flood Zone A means that your mortgage company will require flood insurance on your new home.  When purchasing your home, your REALTOR will let you know if flood insurance is required.  Your mortgage broker will be required to include your first year of flood insurance on your closing statement. 

• But what if you aren’t required to have flood insurance?
• Should you spend that extra money every year to have that insurance? What if the area you have lived in has never flooded?
• What if you do take out a flood insurance policy and live in your home for 35 years, and it never floods?
• What if, what if, what if?

Homeowners Insurance

These are all questions to consider. It’s pretty much guaranteed that you’re going to have to have a Homeowner’s Insurance plan, which unfortunately is not going to cover water damage from a flood. And even more, unfortunately, flood damage can cost tens of thousands of dollars, and possibly more depending on the level of destruction. How much water, how long was it in the house, etc?

Damage From Flooding

In order to answer your questions, you’re going to need to weigh the options—any place that has never flooded in recorded history can still flood (just look at many areas of Louisiana and Houston recently), and a flooded home can cost you a whole lot of money (that you may not have) to get back in your home, even if it only had an inch of water. Or, you could pay a minimal (in comparison to the potential) fee every year and be protected, plus have the peace of mind that you’re protected should the time ever come.

FEMA Flood Maps

It is important to understand, too, that flood plain maps can also change—the land around you is constantly changing and one day you could be in a historically non-flood area and the next day your home could be in a flood zone. Flooding is considered the nation’s common natural disaster and it can happen to anyone.

Include Flood Insurance When You Purchase 

There are many expenses when buying a new home in Granbury.  If you are not required by your mortgage company to have flood insurance, you may think this is one of the areas you can save some money.  Truth is if you live in a Flood Zone C or X - where flood insurance IS NOT required by your mortgage company -- you annual flood insurance premium will be VERY inexpensive.  It becomes a no-brainer to have to protect yourself from a massive financial disaster.  

What Is NFIP?

Since flood insurance is implemented by the Federal Government, of course, they have an acronym to refer to it.  The acronym for "flood insurance" is NFIP - which stand for the National Flood Insurance Program.   Although the NFIP is underwritten by the Federal Government, it is locally written by a local insurance agent.

What Does NFIP Cover?

What do you get out of your flood insurance? Flood insurance covers both the structure and the contents of a home. Many plans cap out at certain amounts and are dependent on the amount of damage, but you can also purchase supplemental plans. If you have anything that is particularly valuable, it may be best to take out a separate insurance policy.

Also important to note is that not all water damage is created equal. In other words, Flood insurance is going to cover water damage if your area floods. However, if your water heater leaks or your roof caves in during a storm, your regular Homeowner’s insurance will cover that.

How Much Does Flood Insurance Cost?

How much is flood insurance going to cost you? Again, this is dependent on where you live, and what type of flood zone you’re in. There are no-flood zones, low, moderate, and high-risk zones. Premiums can start as low as $150 a year to cover contents and home. They can also reach as high as $750 for high-risk flood areas.

If you live in a Flood Zone A - where flood insurance IS required by your lender, then you will need an elevation certificate.  An elevation certificate (not to be confused with Elevate Realty Group :-) will show the hight of your home and compare it to the recommended elevation as set forth by FEMA.  If you are below the requirement, your flood premium will be higher than par -- if you are higher than the requirement, then your premium will be lower than par.  If your Granbury home   sits right at the recommended height, then you will be AT par.  Most of the nightmare flood insurance rates you hear about are homes that are multiple feet BELOW what FEMA has determined to be par. 

What Are The Chances?

According to one statistic, there is a 26% chance that you will experience a flood in your lifetime.

So, ultimately, the question still lies with you—to get flood insurance, or to not? Are you someone who is willing to take the risk and save the cash, or would you rather pay for the peace of mind and potential help should the need arise?

As someone who has spent their life working in real estate - we strongly recomend getting flood insurance EVEN if you are not requried to by your lender.  Especially since if you are NOT required to have flood insurance, your premium will be very inexpensive and can save you from financial disaster.