Flood insurance

#When a mortgage requires it

High-risk areas, called special flood hazard areas, are the zones on FEMA flood maps that begin with A or V. The lender checks the zone during underwriting, and if flood insurance is required, the premium usually goes into your escrow account with taxes and other insurance. Homes outside those zones can still flood, and coverage there is optional and generally costs less.

#NFIP coverage basics

Many policies come from FEMA’s National Flood Insurance Program (NFIP). A homeowner’s policy covers the building up to $250,000 and belongings up to $100,000. Coverage usually starts 30 days after purchase, but there’s no wait when you buy it while making, increasing, extending or renewing a mortgage — so it can be in place by closing.

If rebuilding your home would cost $350,000, the NFIP limit leaves $100,000 uncovered; private or excess flood policies can fill that gap. Flood premiums count toward your PITI when a lender sizes your payment, so get a quote before you make an offer. The mortgage payment calculator shows the effect.