Helpful Mortgage And Real Estate Advice

What About A Home Located In A Flood Plain?

By on November 11, 2013 in Home Buying Advice, Mortgage Videos

You’ve been looking around for a dream home and finally decided on a selection. With a perfect view of a local stream, you are breathlessly awaiting your home loan’s approval. However, your perfect home purchase may have a problem with floods. Nearby streams, lakes and rivers can flood, making your home vulnerable to damage. If your home is subject to floods, there are several things to consider, including flood insurance.

Flood Insurance Basics

If your basement floods from a malfunctioning laundry washer or hot water heater, for example, your homeowner insurance often pays for the damages. Flood insurance is meant to cover natural disaster situations, such as torrential rains. When a home is flooded, an insurance agent surveys the damage and compensates you for structural and personal losses, depending on the policy. If you do not have flood insurance, you must repair and replace items out-of-pocket.

Flood Plain Versus Non-Flood Plain

Every home is evaluated for its flood potential. For homes in high risk areas, such as flood plains, you cannot finance the home with a lender until proof of flood insurance exists. Many homes, however, reside in areas just outside flood plains. Here, lenders do not require flood insurance. Some potential buyers see this opportunity as a way to save money, but it is in your best interest to purchase the insurance. The area can still flood as badly as a known flood plain.

Potential Damage

When a home floods, the floor and part of the walls are soaked through with standing water. Once the water subsides, the home and all the affected belongings are still wet. Industrial heaters must be brought in to dry the area. Building materials are subject to mold which can sicken some people. Drywall, and even some structural beams, need replacement to prevent mold and decay. You’ll need to replace furniture and other personal items. This entire recovery process often costs thousands of dollars. Flood insurance covers all of this damage with a paid policy.

Take Control

You do not need to rely on the government for a flood bailout, such as a federal declaration of a disaster area. Your flood insurance instantly activates when you call in a claim. All of the insurance funds are guaranteed through federal coverage, allowing you to receive the aid you need as rapidly as possible.

Ask an insurance professional about flood insurance coverage. The professional can analyze your home and belongings to give you a fair policy premium you can afford. Being without flood insurance leaves you vulnerable to financial ruin.

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About the Author

About the Author: Jessica Lucas is the managing editor for Mortgage Home Base, a top real estate finance blog dedicated to helping borrowers and home buyers understand the home loan process. Follow Jessica on Google +, and share your comments here. .
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