Flood Insurance in Virginia
Flood insurance is not commonly required except for those who reside in a high-risk flood area with a mortgage payment on the home. Of course, flood insurance is always worth considering, even if neither condition is applicable. Federal Law dictates that mortgages back by the U.S. government must have a flood insurance policy is in the Special Flood Hazard Areas. The insurance must cover an amount equal to the rebuilding cost or maximum limit coverage. Private insurers usually require flood insurance for high-risk homes, but it is not always universal.
Virginia Flood Insurance Requirements
The Flood Disaster Protection Act of 1973 and the National Flood Insurance Act of 1968 requires lenders to enforce minimum flood insurance coverage for those in high-risk zones (1% chance of flooding or more), before providing a loan. Mortgage companies require flood insurance in case a house is destroyed during a flood or the homeowner decides to abandon the house and cease payment.
The guidelines for an individual living in Fredericksburg VA are simple: if you have a mortgage, flood insurance is required equal to the property development cost. The recommended amount of flood insurance is equal to the value of the home and all belongings. For those without a mortgage, flood insurance is not required but the same amount is recommended.
Flood Insurance Recommendations
The recommended amount is derived from the total cost to rebuild your home which is based on the square footage, cost of local labor, and quality of materials. Your homeowner’s insurance company can give you the approximate cost to rebuild. Remember, your home’s rebuild cost differs from the market value as the rebuild cost is lower, so it is important to have accurate information to provide to the flood insurance company.
If you are in Fredericksburg, VA and want more information about flood insurance, contact Insurance Piggy Bank today! Our team of knowledgeable professionals at Insurance Piggy Bank can help you better understand the Virginia state insurance laws and help you find coverage that works best within your financial budget.