Nothing Could Dampen the Joy of Home Ownership...Or could
A flood could.
Floods cause anguish and destruction-physical, emotional,
financial-and the joy turns to heartache. There ought to be
There is a law.
The law can't stop floods. Floods happen anytime, anywhere.
But the Flood Disaster Protection Act of 1973 and the National
Flood Insurance Reform Act of 1994 helps ensure that you will
be protected from financial losses caused by flooding.
Backed by the U.S. Government, flood insurance is available
to residents in more than 19,000 communities across America
that participate in the National Flood Insurance Program (NFIP).
It provides coverage that most homeowners insurance doesn't -
coverage for damage to structures and contents from flooding,
flood-related erosion, and flood-caused mudslides.
In all these communities, you can purchase flood insurance
from any licensed property or casualty insurance agent,
broker, or company.
Flood Insurance is Required by Law
You must have flood insurance to get secured financing to
buy, build, or improve structures in Special Flood Hazard
Areas (SFHAs). Lending institutions that are federally
regulated or insured must determine if the building is in a
SFHA and require flood insurance on:
- conventional home mortgage loans
- FHA loans
- VA loans
- second mortgages
- home equity loans
- home improvement loans
- construction loans
- commercial loans
- farm credit loans
Flood Insurance Protects Your Most Important
Flood insurance coverage is an asset to you as a borrower.
It reimburses you for financial losses from flood damage. With
one annual premium, you have peace of mind that your losses
will be covered.
The law protects you from being uninsured and having to
rely on a costly federal disaster loan after a flood. This
loan is the same as another mortgage that must be paid back
The average annual premium for flood insurance is $350 per
year. Compare that to loan payments that could amount to $300
All taxpayers benefit too, when those in flood-prone areas
buy flood insurance. As floods occur, the insurance mechanism
pays for the covered losses, rather than U.S. Treasury funds
for federal disaster assistance.
How Much Flood Insurance Should You Buy?
The law requires flood insurance in an amount equal to the
outstanding principal balance of the loan, the value of the
building, or the maximum limit of coverage available under the
Act, whichever is less. It also requires flood insurance to be
maintained for the life of the loan.
While the law only requires coverage for the loan balance,
you should consider protecting your own equity. It's wise to
insure primary residences or businesses in sufficient amounts
to fully protect your property.
Up to $250,000 coverage is available for single-family
residential buildings and $100,000 coverage is available for
contents. Other residential and commercial property owners can
also obtain flood insurance.
Financial Protection-Peace of Mind
- Protects your most important investment, your home and
- Considerably less expensive than federal disaster loans
- 100% backed by the U.S. Government
- Prompt claims handling through your agent
- Toll-free telephone number 1-888-FLOOD29 or TDD#
1-800-427-5593 to answer your questions about flood
For Further Information
Details on flood insurance are available from your
insurance agent or company. Call today, and have your proof of
purchase of flood insurance ready at loan closing.
Then, you can be sure that floods won't cause financial
heartache to dampen your joy of home ownership.
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