The most significant and valuable asset that most people will ever own is their home. Because of this, making sure that it is properly protected by insurance is extremely important. When they are looking to build a home insurance policy, many people may also need to consider purchasing flood insurance. There are several situations in which flood insurance may actually be required in order for you to qualify for your mortgage.
Mortgage Lender Requirements
In general, the main source that will determine whether or not you need to have flood insurance is your mortgage lender. If you have a mortgage that is backed by the FHA, the mortgage lender will be required to make sure you have and carry flood insurance if you live in a determined flood zone. In many situations, the lender may also require that you escrow for this on a monthly basis and they could pay the insurance company directly.
Flood Zone Map
Whether or not you will be required to carry flood insurance by your mortgage provider will depend on whether you are located in a flood zone. FEMA manages a real-time flood insurance map that will dictate certain areas that are prone to the risk of flood. The map will then classify which type of flood insurance you will need to have. Depending on what zone you live in on the map, the cost of flood insurance can vary considerably.
For those that are in the Austin, TX area, understanding flood insurance needs is very important. Because of this, meeting with an Austin, TX area insurance provider, such as the Southwest Insurance Center, could be a very good option. The Southwest Insurance Center can help you to better understand your flood insurance requirements and make sure you have adequate coverage.