Do all homeowners need flood insurance, and how can they decide?

There are federal regulations concerning when flood insurance is required that are tied to whether there is a mortgage on the property. If the home is located in a Special Flood Hazard Areas, identified on maps produced by the FEMA, then you will probably be required to carry flood insurance. Most people purchase flood insurance through FEMA’s NFIP, but you can also sometimes purchase privately offered flood insurance. 

When you place a mortgage against a home, the mortgage company is required to determine if flood insurance is required. Mortgage companies normally rely on companies that specialize in this process to make the determination. If flood insurance is required, the homeowner should be notified as part of the process of closing the mortgage and will be required to purchase a flood insurance policy before the mortgage goes to closing. Homeowners should consult a local insurance agent if they are required to purchase flood insurance.

If you are not required to purchase flood insurance, it doesn’t necessarily mean you don’t have a substantial risk of flooding that warrants purchasing flood insurance. Local stormwater management/flood control professionals and building officials can often assist homeowners in understanding the risk of their home flooding. Once a homeowner has a good understanding of their flood risk, they should consult a local insurance agent who is knowledgeable of the process of producing flood insurance.