Buying, selling, or owning land in a flood plain comes with its own set of challenges and risks, but those can be minimized by proper adherence to governmental regulation, a dose of common sense, and a necessary investment in flood insurance. Standard home owner’s insurance does not cover flood damage. Federal flood insurance (which may be purchased through your insurance agent) is the only guaranteed insurance coverage for flood damage. If a house or other building is in a designated Special Flood Hazard Area (high-risk area), then federally regulated or insured lenders must, by law, require the purchaser to buy flood insurance as a condition of their loan. While property located outside of a hazard zone does not by law have to be insured, a lender has the right to require it as a condition of providing you a mortgage, should they so choose.
What is a Special Flood Hazard Area (SFHA)? Areas with the highest risk for floods are shown on Flood Insurance Rate Maps as Zones, beginning with the letter A or V. As a rule of thumb, it is expected that these zones hold a one in four chance (25%) of experiencing a damaging flood sometime over the course of a 30-year mortgage. My buildings are outside the flood plain zone so I don’t need to buy flood insurance. The U.S. government’s National Flood Insurance Program regularly releases claim data that indicates at least 25% of insurance claims emanate from outside identified and regulated flood plains. Floods can happen anywhere at any time. Some people mistakenly assume that federal disaster aid will be granted and cover their losses in a flood, but this is only the case if the President of the United States declares your event a disaster. Additionally, this aid may be in the form of a loan which must be repaid.
Where do you find copies of flood plain maps? Local flood plain administrators are typically found in the local permitting office. This may be the building commissioner, plan commission director, or other building and planning officer in your community.) The maps can also be accessed on the FEMA website at fema.gov or the official website of the National Flood Insurance Program, floodsmart.gov. You can’t buy flood insurance if the property or structure(s) have previously been flooded. Even if your property has been flooded and damaged previously, you may purchase insurance if your community is participating in the National Flood Insurance Program.
The NFIP does not offer any type of basement coverage. Yes it does. The NFIP defines a basement as any area of a building with a floor that is sub-grade below ground level on all sides. Basement coverage under an NFIP policy includes clean up expenses and items used to service homes and buildings. These can include elevators, furniture, water heaters, air conditioners, freezers, utility connections, circuit breaker boxes, pumps, and tanks used in solar energy systems. Flood insurance will not cover the contents of a finished basement and basement improvement such as finished walls, floors and ceilings.