September 6th, 2012
In the wake of Hurricane Isaac, and the extensive flooding that resulted, more insurance professionals are highlighting the importance of homeowners purchasing flood insurance to protect their home and assets.
Flood insurance is not included in a standard homeowners policy and each state may have different stipulations about what these policies cover. However, as thousands of residents in Louisiana discovered, failing to purchase a policy can leave homeowners on the hook for covering the costs of damage, repair and replacement following a hurricane or strong storm.
In other cases, mortgage lenders may refuse to fund a home in a high-risk area that is not covered by the National Flood Insurance Program, according to the Wall Street Journal.
Because state laws vary, it's also crucial that transferees speak with their mortgage consultant about their particular state's policy regarding coverage and the specific property they wish to purchase. The Federal Emergency Management Agency has redrawn flood maps in several states as of late, which may affect current and relocating residents. Those who were previously exempt from purchasing coverage in a flood-prone area may now be required to carry a policy, the Journal notes.
Understanding each state's requirements prior to relocating can facilitate the process and make the transition easier for transferees.