Who should buy flood insurance?
Ten million American homes lie within high flood-risk areas, and those homes are four times as likely to be damaged by flooding during a 30-year mortgage as they are by fire, according to the Federal Emergency Management Agency (FEMA). Yet only approximately 25 percent of those homes are covered by flood insurance. Buyers of federally backed mortgages, such as FHA or VA, are required to buy flood insurance if the home or business is located in a flood zone. Unfortunately, many remain uninsured because homeowners sometimes let the policies lapse after the first year, some mortgage lenders have failed to comply with the requirements, and properties may have been bought before the law went into effect in 1968, according to FEMA. Even people in lower-risk areas should consider flood insurance. FEMA reports that one-third of the claims come from outside high-risk areas. Flooding from hurricanes is covered, but buildings in certain undeveloped coastal areas are not eligible for flood insuran
