Whether you’re in the process of buying a new home or you just paid off your mortgage, at some point, you’re going to ask yourself, “Do I need flood insurance?”
Some lenders require homeowners to obtain a flood insurance policy. However, some do not. It generally depends on the risk of flooding around the home.
A flood is “an overflow of water onto land that is normally dry.” A flood in one area can look different from another by covering just a few inches of land in water versus several feet.
Flood insurance is a standalone insurance policy that covers damage caused by flooding. It covers building replacement costs and personal property losses.
If you live in a low-risk area, you may not be required by law or your lender to carry flood insurance. However, by federal law, if you have a mortgage and live in a high-risk area, you will be required to have flood insurance.