After the devastating hurricanes, we have a unique situation out there in the insurance world. I wanted to take just a minute to talk about flood insurance here in Texas and how it relates to your mortgage.
When you take out a home loan, your lender is required to pull a flood certification to see if your property is in a flood zone. If you are, you’ll be required to take out a flood insurance policy. These can get quite pricey.
You have to pay for them in full prior to closing, and you have to have them escrowed in your account regardless of whether you’re escrowed for taxes or insurance. It’s very important that if you are in a flood zone or looking at a home in a flood zone, you learn about it early on in the process so you can have time to make an educated decision on how to proceed.
Being from New Orleans and having to go through Hurricane Katrina, I have deep sympathy for all of our friends in Houston and Florida. I’ve learned from first-hand experience that the biggest floods tend to happen in non-flood zones. Even if your home isn’t in one, I encourage you to at least have a conversation with your insurance professional about what exactly your policy covers. Many of them don’t protect against water damage at all.
If you have any questions in the meantime or if you know anyone looking to buy a home in the near future, don’t hesitate to reach out and give me a call or send me an email. I look forward to hearing from you soon.