Flood insurance

In 1968, Congress created the National Flood Insurance Program (NFIP) in response to increased costs of tax payer funds for flood victims and increasing amount of damage by floods.  An administration under the Federal Emergency Management Agency (FEMA) manages the NFIP.

If you are looking to buy, build, or improve any dwelling / structure that is located in a flood zone (also known as Special Flood Hazard Areas) you will be required to purchase the appropriate flood insurance.

From a lender’s stand point your coverage will have to meet one of the following:

·       Coverage to the  maximum coverage amount ($250,000)

·       Coverage to the loan amount

·       Coverage to the value of the structure in the flood zone

A lender obtains flood certificates for every mortgage request.  The certificate is derived from mapping completed through FEMA of the property in question, and provides the answer of if the property is located in a flood zone or not.