Is it required to have flood insurance? (Mastic, Mastic Beach: 2014, homeowners insurance)
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"they" would be the original home owners who had the house lifted---I understand why "they" would be required to have flood insurance, but once the house has been lifted above the flood stage, why would any potential future buyer be subject to maintain this coverage as there is no way the house would flood unless there was a tidal wave!
I don't know anything about what this "covenant" may or may not involve, but if the house was raised the flood insurance is likely to be VERY cheap. Like $500 a year. Certainly not a dealbreaker if you love the house.
"they" would be the original home owners who had the house lifted---I understand why "they" would be required to have flood insurance, but once the house has been lifted above the flood stage, why would any potential future buyer be subject to maintain this coverage as there is no way the house would flood unless there was a tidal wave!
I would guess this is what happened...
They raised the house using New York Rising funds, they got help from the state to recover from Sandy. This help comes with conditions that the state added as a covenant to the deed/property.
The state wants owners to get insurance so they won’t have to bail someone out again with the next super storm.
If the house comes with a restrictive covenant that flood insurance must be carried, then it must be carried. Period.
From the NY Rising publication on this issue (pertinent parts in bold):
All Applicants who receive funds from the NY Rising Housing Recovery Program for a structure located in the 100-year floodplain are required to maintain an active flood insurance policy on their property, in perpetuity.
In the event of a sale or transfer of the property, you and all subsequent owners shall, on or before the date of transfer, notify the transferee in writing of the requirements to obtain and maintain flood insurance in accordance with Federal law. The Program strongly encourages you to record this requirement in the deed that transfers the ownership of the property. The covenants, terms, provisions and conditions regarding flood insurance will run with the land, binding all subsequent owners, encumbrances and tenants of the Property.
So yes, in this case flood insurance is required. If you buy the house, you must always carry flood insurance on it, as must anyone who eventually buys it from you. It's not arguable or negotiable, it is what it is.
If not in the zone you may still have exposure to flood as the flood maps do not guarantee a flood will not reach you. Lakes, dams, rivers can flood with very heavy downpours.
I am 1/10 of a mile from the flood map boundaries. My insurance agent found a national, well known insurance company, that provided flood insurance and the cost was very low.
“More than 20 percent of flood claims come from properties outside high-risk flood zones.”
Homeowner insurance can cover loos from fire, gas explosion, airplane hitting your home but does not cover loss due to flood
No guarantee another Sandy will not roll through. And Sandy was just at the cusp to qualify as a Hurricane.
Ask the MTA and Amtrak about the impact from Sandy
I am 1/10 of a mile from the flood map boundaries. My insurance agent found a national, well known insurance company, that provided flood insurance and the cost was very low.
Separate independent policy? All the ones I’ve ever bought from Allstate, etc. are NFIP resales.
OP said there's a restrictive covenant on the property from NY Rising that requires all future owners to keep flood insurance on the property. The seller's agent should be making that crystal clear to any interested buyers.
Federal law requires the recipient of federal disaster assistance to notify the purchaser of their property of the obligation to obtain and maintain flood insurance in perpetuity. If you sell your property without notifying the purchaser of the obligation to obtain and maintain flood insurance, and the purchaser fails to secure flood insurance, the property is later storm damaged, and the purchaser of your property receives federal disaster assistance, then you will be required to reimburse the Federal government in the amount of assistance provided to the purchaser.
What is a restrictive covenant?
Any type of agreement that requires all subsequent buyers to take or abstain from taking a specific action. In real estate transactions, restrictive covenants are binding legal obligations written into the deed of a property by the seller.
The upper paragraph explains that if the Seller does not notify a Buyer of the requirement, AND as a result of that failure the buyer does not get flood insurance, then the Seller would have to pay for any later federal-assisted storm damage repairs even though they would no longer own the house. BUT in this case the OP has been alerted to the covenant, and thus must get flood insurance if s/he buys that house.
Last edited by BBCjunkie; 07-04-2019 at 11:53 AM..
The covenant is in place so freeloaders don’t pass on flood insurance and then demand FEMA money when there’s flood damage.
Also to make sure that people don't buy a covenanted property on spec and then flip it to someone else without disclosing the covenant (because they think/know it would make the property harder to sell.) Or at least if they do hide it, they know they will be on the hook for a chunk of change if the buyer ever ends up needing FEMA money for anything afterward.
Although if the covenant has been recorded as part of the deed (which it should have been), the title search done by any future buyer should pick it up even if the seller deliberately "forgot to mention it." So unless a house had a recent covenant followed by a quick 'flip', it's more likely to be discovered than not.
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