Will My Dream Lakefront Home Require Flood Insurance?

About 15% of all lakefront properties will require flood insurance by the lender. This means that they have determined (through FEMA Flood Insurance Rate Maps) that the property sits in a flood zone. Flood insurance is not cheap and can cost anywhere from $500 per year to $5,000 per year.

Here’s some facts about flood insurance that you need to know:

  •  Prior to purchasing your dream lake home, have your Realtor pull a “Flood Certificate” to determine if the property is in a flood zone. Lakefront Living Realty can do that for you for free! Just e-mail us the address.
  •  FEMA maps change daily. So DO NOT BELIEVE the seller or sellers agent when the tell you that the property never needed flood insurance. That may have been true yesterday, but possibly not today.
  • If you are a cash buyer, then there’s no lender asking for flood insurance. But you should still know if it’s in a flood zone for 1. for a future sale and 2. you may want to buy it anyway so you’re covered.
  • Standard homeowners insurance does not cover flood damage at all. It’ll cover some damage from rain, but if your home is filled with water as a result of rising bodies of lakes, rivers, streams, and oceans, it won’t cover you.
  • If you have a basement, you’ll have more risk because the NFIP (National Flood Insurance Program) limits coverage for basements, crawlspaces, or any living space where the floor is below ground level.
  • Pricing for flood insurance can vary greatly! Shop around to different Insurance providers to make sure you’re getting the best deal.
  • If you believe a property has been inadvertently mapped as being in the floodplain, it can be appealed using a LOMA (Letter of Map Amendment).
  • For a complete list of FAQ’s on all your flood insurance questions, visit FloodSmart.gov.

Key Point: Don’t wait for an impending storm to purchase federal flood insurance. There’s usually a 30-day waiting period. Some private policies offer a 15-day waiting period.

Posted by Scott Freerksen “The Lake Guy”

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