Today is the last day to buy discounted FEMA (Federal Emergency Management Agency) flood insurance if your property’s flood status changed when FEMA redrew its maps. Today, June 16, the maps become effective and “preferred rate” policies are available until the end of the day. If a property is in what FEMA considers to be a high-risk flood area then homeowners are usually required to obtain and maintain flood insurance on the property. While this insurance can be as low as $129 a year, high-risk zone insurance costs can be more than $1,500 a year. If the lender on the property is federally regulated or insured, you definitely will need to obtain the insurance in order to maintain your mortgage.
While real estate investors are often able to circumvent many of these insurance issues, particularly if you only plan to hold a property for a few days or weeks, if that property is in your name when disaster strikes you will be liable for repairs. There are a number of short-term policies that you can take out on investment properties, but always make sure that you are clear on what requirements may be in place for flood insurance before you buy since that can have a major impact on the overall cost of the home for a buyer.
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