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7 Things to Consider Before Purchasing Property in a Flood Zone

In the last two years, South Carolina experienced severe, weather related flooding resulting in over a billion dollars worth of damage, and more importantly, a loss of life. For many South Carolinians, major flooding of their homes seemed so unlikely that it was all the more devastating when it actually occurred.

However, flooding and the damage it causes is a reality of owning property. If you are currently looking for property to purchase, it is important to assess your investment for flood risk when making your decision to buy. Here are 7 considerations we recommend addressing when planning to buy a home or similar real estate in a flood zone.

1. Weather is only one cause of flooding.

While severe weather is often the cause of the widespread flooding that you see reported on the news (as well as the severe flooding in South Carolina), it is not the only cause of flooding. Home owners can experience flooding caused by new construction with insufficient water diversion nearby, or a blocked storm drain. Keep in mind that even minor issues like poor drainage can produce flooding on your property and costly repairs.

2. Your prospective new home could be in a flood zone.

Before you sign on the dotted line, look online to determine whether your prospective home is located in a flood zone. If so, you should talk to your insurance agency and get a quote for flood insurance. Since properties located in flood plains aren’t required to be disclosed to prospective buyers, many home owners don’t discover their flood risk until after purchase.

3. You may still need flood insurance with reduced flood risk.

If you purchase a home in a flood zone, your lender may require you to purchase insurance, regardless or risk. Lenders often want to take every precaution to minimize risk and insure a return on their investment. Even if the odds are slim that you will ever experience a flood, those odds may still be too risky for your mortgage lender.

4. Flooding generally isn’t covered by homeowners insurance.

While standard homeowners insurance helps to protect you from losses caused by fires, hail, lightning strikes, and other natural disasters, it rarely covers flood damage. If you are not required to have flood insurance, you should weigh the benefits against the disadvantages of purchasing flood insurance for your investment. In a worst case scenario, how will you cope if you lose your home to flooding and have no insurance?

5. Only a portion of your property could be at risk.

It isn’t always all or none when it comes to properties in flood zones. You may find that only a portion of your property is within the flood plain. Segments of property, especially those not containing your home, found in flood zones can reduce insurance costs.

6. Buying flood insurance for your property may be mandatory.

In addition to lenders sometimes insisting on flood insurance, the federal government can also demand that properties be insured when federal assistance is used to buy and/or build on land in high-risk flood areas, or Special Flood Hazard Areas (SFHA). Talk with your mortgage lender to determine whether your property is a SFHA and whether you will have to purchase insurance.

7. Flooding does more than cause water damage.

In addition to the water damage caused by flooding, there are also the inconveniences and expenses of relocating your entire family during and after the flood, mold issues, and risks to health and life. Before you buy a home, research and develop a plan for possible flooding.

In the event you do experience flooding, water damage, and mold in your home or property, call the professionals at ServiceMaster. We are experts when it comes to water and mold remediation, and we will have your home or property back to normal in no time.

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