| Homeowners
insurance. All mortgage lenders require that
the borrower have some type of homeowners insurance to
protect their investment against loss to the property.
Homeowners insurance (also called hazard, or fire
insurance) ensures that the property will be replaced or
the damage will be repaired up to the amount of coverage
obtained. In most states, coverage must be equal to the
loan balance or the value of the home, whichever is
greater. Your homeowner's policy must meet the lender
requirements.
Flood Insurance
Flood insurance.
Homeowners insurance does not cover flood-related
damage. If you think your home is at risk, you might
want to consider purchasing flood insurance.
The
National Flood
Insurance Program (NFIP), established by Congress,
enables property owners to purchase insurance protection
against losses from flooding. It is administered by the
Federal Emergency
Management Agency (FEMA).
If your home is in a
special flood hazard area flood insurance is required as
a condition of granting a mortgage loan. You may consult
special flood insurance maps, published by the FEMA, to
determine if the property is in a special flood hazard
area (SFHA). These maps are usually kept on file at
local town hall or county building and are available for
your review. Or these maps may be ordered by phone or
fax from FEMA.
Flood insurance premiums
depends on the amount of coverage purchased, location,
age of the building, building occupancy, the design of
the building, and, for buildings in SFHAs, the
elevation.
Read these
facts about Flood Insurance from FEMA. |