Decades ago, flood insurance was somewhat of an afterthought as most of the United States was seemingly safe from water intrusion. Climate change, the increased frequency of hurricanes, and home construction in waterlogged areas have all changed how we view flood risk.
Nowadays, every homeowner should at least consider adding flood insurance. However, there is some confusion as to whether mortgage lenders in and around Scottsdale, AZ have a mandatory flood insurance requirement.
Flood Insurance for a Home Loan?
If you are buying a home in an area with a high flood risk, the lender will likely require that you obtain flood insurance. Home loan lenders require such insurance as it safeguards their investment.
Moreover, mortgage lenders mandate flood insurance for houses in spaces that FEMA has specifically designated as flood zones. If you aren’t sure if the house you are targeting is in a flood zone, contact the Homeowners Insurance Group for guidance.
Those buying a home in an area that is not at high risk of flooding during the year might not be required to obtain flood insurance. There’s no harm in asking. Reach out to potential mortgage providers and ask each if they add conditions to local mortgage agreements mandating flood insurance.
Flood Insurance Makes Financial Sense
In the end, it is often mutually beneficial for home buyers and mortgage lenders to coordinate the terms of flood insurance. Even if the area you are buying in hasn’t flooded at a high frequency, flood insurance provides invaluable peace of mind. Keep in mind, standard home insurance does not include coverage for flood damage.
Obtain flood insurance and you’ll sleep soundly, knowing your home and your possessions are protected in the event of a flood, hurricane or other water intrusion. Such insurance typically covers the home’s replacement cost, the mortgage’s unpaid balance or the max figure permitted by the National Flood Insurance Program.
Contact the Homeowners Insurance Group
Are you in the market for flood insurance or other insurance in or around Scottsdale, AZ? Give us a call for a quote.