June 24, 2009

Flood Insurance, Lenders & Fema’s Magic Vents

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Maintaining Flood Insurance

A few days ago I opened my mail to find a notice from my flood insurance company. It seems that, unbeknownst to me, the policy had lapsed a few short days prior.  Honestly, I hadn’t received an invoice or I would have paid the bill.  It was such a hassle getting that policy to begin with, I didn’t want to stir up any trouble even by accident.

Flood insurance is a fact of life for many home owners in south Florida.  If there’s a mortgage on a property in a flood zone the lender requires a flood policy in place to protect their interest.  Even if you have an unused line of credit on a home in a flood zone it a requirement to have flood insurance. If you have a mortgage you can expect flood insurance costs to be part of your household expenses. 

It may surprise you to know that even elevated homes need flood insurance. My home is elevated but since I have a garage at base level FEMA and my lender looks at my garage as living area; glorious living area with the most expensive ten sheets of ceiling drywall in all of Florida.

Special vents had to be installed in the walls in order for the insurance to be approved. The vents do nothing but let more moisture into the home and an opportunity for flood water to pour in through the vents. It’s genius. Some engineer with more time in college then common sense decided that gaping holes in garage walls would save the world. I’ll remember to silently thank them in prayer the next time I’m scrubbing down the walls with a Clorox based concoction getting rid of the mildew.

What fascinates me about the flood insurance, besides the fact that I had to jump through flaming hoops, wrapped in barbed wire, to get it is that if your policy were to lapse the bank is nice enough to pick on up on your behalf to continue coverage and protect their interests. 

I guess the banks don’t have time shop for rates since they’re so busy approving short sales and liquidating foreclosures in a timely fashion because the coverage they found me is $3,075 per year, plus interest, and will only cover the structure. None of my personal property or living creatures like Goober my grand-hamster are protected.

My flood policy is less than $600 per year, by the way. My insurance agent called and it turns out that I had a few days left in the grace period to get a check to the insurance company and avoid the thirty day waiting period for a new policy to become valid. Yes, just because you pay your policy doesn’t mean it’s active and that you’re covered. There is a thirty day period you have to get through, first.

Home ownership is a big responsibility. There are safety measures built into the process, though. Rest assured knowing that your lender is going to be there to pick up the slack and get you covered if you make a mistake and the government is helping them keep it all regulated and, of course, vented.

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