As a rule of thumb, most folks generally understand the need for insurance. And many times, it doesn’t have to be mentioned twice before they go and buy it. However, for those of us who like to live on the edge and go without insurance, this may prove to be a problem. Not only does it leave us in the rain without an umbrella when there’s a disaster, but it may pose a problem legally.
Why would there be a legal problem? Because some types of insurance, such as flood insurance for your mobile home, are a requirement. It’s generally not a big deal if you didn’t know this, so long as you go and get your flood insurance right away. However, if this is the first time you’ve heard of this, you’re probably wondering where to begin. And that’s where we can help.
Let’s take a look at the mandatory purchase of flood insurance guidelines, and then at a few other related topics.
The mandatory purchase of flood insurance guidelines and requirements
The FDIC (Federal Deposit Insurance Corporation) is going to help us understand the requirements for flood insurance a little better. They state that “Basic Requirement Flood insurance, either issued through the NFIP or from a private insurance provider, is required for the term of the loan on buildings or mobile homes when an institution makes, increases, extends or renews a designated loan, meaning all three of the following factors are present:
- The loan (commercial or consumer) is secured by improved real estate or a mobile home that is affixed to a permanent foundation (security property);
- The property securing the loan is located or will be located in an SFHA as identified by FEMA;
- The community in which the property is located participates in the NFIP. In the case of mobile homes, an institution does not have to obtain a security interest in the underlying real estate in order for a loan secured by a mobile home to be covered by the regulations.”
The minimum amount required
As you may already know, there is a maximum amount of insurance that one can get. Subsequently, there’s also a minimum amount required for flood insurance. The FDIC tells us exactly what the minimums are, so we can understand it better the mandatory purchase of flood insurance guidelines.
“The minimum amount of flood insurance required must be at least equal to the lesser of the outstanding principal balance of the loan, the maximum amount available under the NFIP for the type of structure, or the insurable value of the property. Flood insurance coverage under the NFIP is limited to the building or mobile home and any personal property that secures the loan and not the land itself. The limits of coverage for flood policies are:
- $250,000 for residential property structures and $100,000 for personal contents.
- $500,000 for non-residential structures and $500,000 for contents.
- $500,000 for non-condominium residential buildings of five units or greater and $100,000 for personal contents.”
Now that we’ve looked at the requirements of flood insurance for mobile homes, it’s time to move on to the part of it that’s near and dear to all of our hearts. Namely, the cost. For most of us, money generally doesn’t come without hard work, which means it’s not something we give away easily.
While we have general estimates on the cost, we can’t be entirely sure, since there are a few variables. Value Penguin estimates that “The average cost of a flood insurance policy through the National Flood Insurance Program (NFIP) is $699 per year. The cost of your policy, however, will depend on how much coverage you need, as well as how close to the water you live.”
Why do I need it?
As much as we love them, we know that our mobile homes don’t stand much of a chance against a hurricane. Which means that it makes sense to be careful and protect them with insurance. Besides, even when it’s not a requirement, it’s safer not to risk a disaster.
Where to buy flood insurance
Now that we know about the mandatory purchase of flood insurance guidelines, it’s time for you to buy some, if you haven’t already. You can buy it straight from the NFIP (National Flood Insurance Program) or from a private insurance company. Once you’ve done that, your job is complete! Consider taking a break from your daily work and learn how to make the inside of your mobile home unique.