Saturday, July 28, 2007

Buying Flood Insurance

he National Flood Insurance Program (NFIP) is your primary source for flood insurance in the U.S. If your community participates in the NFIP, you can purchase flood insurance from a licensed private insurance company or independent property and casualty insurance agent in your state.

Talk to your insurance agent if you have questions, would like additional information, and/or are ready to purchase a flood insurance policy. Your policy will take effect 30 days after your purchase.

If your insurance agent is unfamiliar with the NFIP or is not licensed to sell National Flood Insurance, you have several additional options:

What if flood insurance is required? If you buy a house in a designated high-risk area and receive a mortgage loan from a Federally-regulated lender, by law your lender must require you to purchase and regularly renew flood insurance.

In this case, you do not have to wait 30 days for your policy to take effect. Your flood insurance protection is immediate, ensuring that you don't get caught without flood insurance if a flood threatens your home. You may also be able to escrow your premium payments.

30-Day Wait
There is a standard 30-day waiting period, from date of purchase, before a new flood policy goes into effect. However there are some exceptions to the 30-day wait.

  • If your lender requires flood insurance in connection with the making, increasing, extending or renewing of your loan.
  • If an additional amount of insurance is required as a result of a map revision.
  • If flood insurance is required as a result of a lender determining that a loan, which does not have flood insurance coverage, should be protected by flood insurance. The coverage will be effective upon the completion of an application and the presentment of payment of premium.
  • If an additional amount of insurance is being obtained in connection with the renewal of a policy.

Buying Insurance
When you are ready to purchase insurance, talk to your agent. He or she will help you determine the flood insurance coverage that will best meet your needs.

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