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Is flood insurance necessary?

Flood
One simply has to appreciate the wonderful real estate you can find in New Jersey, especially since the Garden State is approximately only two hours away from Manhattan. However, one of the things you need to know about moving to New Jersey is that you have to be ready for water. It could be water to temper hot summers or water as flood, especially in areas near the coastline.

Given how water is almost synonymous with living in New Jersey, the issue of whether or not flood insurance is needed will crop up. Here’s what you need to know:

Requirement or not?

No federal law cites that anyone buying a home in any US state is required to get flood insurance. However, if you are getting an FHA loan to finance the purchase of a property in New Jersey, acquiring flood insurance becomes mandatory, especially in Special Flood Hazard Areas.

Lessons from the Past

There were hard lessons to be learned from the devastation caused by Hurricane Katrina that left New Orleans in ruins. The disaster became a turning point for many Americans to find out how prone they are to flooding. With that, a spike in applications for flood insurance came in, especially among those living along the coastlines.

Unfortunately, since 2005, the number of homeowners with flood insurance for their homes has dwindled. In a 2017 article in the Washington Post published just after Hurricane Harvey’s wrath, it was discovered that only 20% of households most susceptible to flooding have flood insurance in place. A more recent report (2019) published by the Insurance Information Institute revealed that the number of New Jersey homes at risk of going under in a storm surge can go as high as 381.55 thousand.

The statistics say it all: Flood insurance is, indeed, a necessity in New Jersey.

Safety Precautions

Here’s a fast fact for would-be or existing New Jersey homeowners: flood insurance is still different from home insurance. In the first place, your home insurance doesn’t cover damages to the home due to flooding.

Another thing to consider is whether your home is in a flood-prone area or not. FEMA has prepared a flood map tool where you can simply enter your address onto a search bar to find out how susceptible your area is to flooding.

Note that even in an area where only minimal flooding is expected, changes in weather patterns can still bring about sudden surges. A November 2019 report from Rutgers University is a testament to this: sea levels along the New Jersey coast has been rising at an average of 0.2 inch per year between 1979 and 2019.

Simultaneously, the land by the coastline has been sinking due to subsidence. With all these factors coming in, flooding may occur even just with the movement of tides.

Not a Cause for Worry

While securing flood insurance is necessary, it is merely a safety net should the unthinkable happen. All you need to keep your mind off potential flooding problems is the guidance of a reliable agent who knows the area by heart – someone who can recommend great places like Colts Neck where real estate has minimal to no issues with flooding.

Contact Colleen Meyler, Broker-Associate today and see how she can help you with your New Jersey real estate goals!

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