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October 13, 2022

Understanding Flood Insurance

Living near water is often a desirable location, but not so nice when it’s creeping into your house. Water damage can be extremely destructive and expensive to repair. A single inch of floodwater can cause up to $25,000 in damage, according to the Federal Emergency Management Agency (FEMA). This doesn’t mean you should avoid buying a home in an area at risk of flooding, but you need to be prepared for the possibility.

What is a Flood Zone?

FEMA maps different areas to designate their risk of flooding. 

  • Special Flood Hazard Areas are high risk zones.
  • Moderate-Risk Zones are less likely to flood but can still experience flooding from time to time.
  • Minimal-Risk Zones are at a low risk of flooding, but it can still happen.

Assessing Your Risk

If your home is in a flood zone, your lender may require you to purchase flood insurance to protect your assets against the damages of flooding. Flood insurance is in addition to homeowner’s insurance and can be more expensive depending on the flood risk. Resell might also be a fact since it is often difficult to sell a property which requires flood insurance.

You can search your address from the FEMA website.

Elevation Certificates

If your home is in a high-risk area, you will likely need an Elevation Certificate (EC). An Elevation Certificate documents important features of your property, including its location, flood zone, building characteristics, and more importantly, the elevation of its lowest floor. The Elevation Certificate is needed to know your building’s elevation compared to the estimated height floodwaters may reach in a major flood. This helps determine your flood risk and the cost of your flood insurance premium.

Letter of Map Amendments & Letter of Map Revisions

If you believe your property has been built high enough to avoid floodwaters, you may petition FEMA for a Letter of Map Amendment or Map Revision. You will be required to employ a survey of the property to confirm that the lowest level of the property sits above the elevation the floodwaters may reach in a major flooding event. This survey will be completed at the homeowner’s expense and could take up to 60 days for FEMA to process.

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                             Divison of Banking Locations                                                                                  Phone Numbers

          Springfield Office                               Chicago Office                                          General Inquires                              TTY

        Division of Banking                         Divison of Banking                                       1-888-473-4858                   1-866-325-4949 

 320 West Washington Street       100 West Randolph, 9th Floor                                                  Divison of Banking

       Springfield, IL 62786                        Chicago, IL 6060                                                                 1-844-768-1713

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1701 52nd Avenue, Moline, IL  61265

866-441-1862    customerservice@ruhlmortgage.com

 

For more information regarding licensing, go to www.nmlsconsumeraccess.org

                             Divison of Banking Locations                                                                                  Phone Numbers

          Springfield Office                               Chicago Office                                          General Inquires                              TTY

        Division of Banking                         Divison of Banking                                       1-888-473-4858                   1-866-325-4949 

 320 West Washington Street       100 West Randolph, 9th Floor                                                  Divison of Banking

       Springfield, IL 62786                        Chicago, IL 6060                                                                 1-844-768-1713