Here at LeapFrog Insurance, serving the greater San Antonio, TX area, we have found that many customers have questions about flood insurance. Your home insurance policy typically does not cover flood damage, so purchasing a separate policy specifically for flooding is recommended. One of the questions we are often asked is whether a lender can require you to carry flood insurance. If you have this question, read on to learn the answer.
Can a Lender Require You to Carry Flood Insurance?
A lender can require you to carry flood insurance. Depending on where you are living and the likelihood of a flood, many do have this requirement. Your lender has an interest in your home. If you default on the payment, they can foreclose on the home and sell it, helping to recover their money. If the home is damaged in a flood, and you do not have flood insurance, they can lose money. This is why many require flood insurance, especially for those living in an area prone to flooding.
How Do You Know if Your Lender Requires You to Carry Flood Insurance?
If a lender requires you to carry flood insurance, it will be written into your mortgage contract. They cannot require you to carry it if it is not written into the contract at the time you sign your mortgage and take out the loan.
Even if a lender does not require you to purchase flood insurance, it is always recommended that you do. You can lose everything in a flood and your home insurance policy will not help you if you do not have this add on policy. Contact us here at LeapFrog Insurance, serving the greater San Antonio, TX area, today to learn more about buying a flood insurance policy.