Flood Insurance
You don’t need to live near the water to be at risk of flooding and just because your house has not flooded in the recent past does not mean you are safe. Remember, homeowners’ insurance policies do not cover losses caused by flooding!
Manasquan participates in the National Flood Insurance Program, which makes flood insurance available to everyone. Manasquan also participates in the Community Rating System (CRS) which evaluates municipalities for its flood preparedness efforts, contributing to overall flood insurance rankings and flood insurance premium deductions. Manasquan residents automatically recieve a 25% reduction in annual flood insurance premiums as a direct result of participation in the CRS program. We strongly urge you to consider buying flood insurance to protect yourself from devastating losses due to flooding.
Property owners can insure their buildings and contents and renters can insure their possessions. There is a 30 days waiting period before a flood insurance policy takes effect. Call your insurance agent for more information.
About the Mandatory Purchase of Flood Insurance
The NFIP:
The National Flood Insurance Program (NFIP) is a federal program enabling property owners in participating communities to purchase flood insurance on eligible buildings and contents, whether they are in or out of a floodplain. Manasquan participates in the NFIP, making federally backed flood insurance available to its property owners.
The NFIP insures most walled and roofed buildings that are principally above ground on a permanent foundation, including mobile homes, and buildings in the course of construction. Property owners can purchase building and contents coverage from any local property and casualty insurance agent. To find a local insurance agent that writes flood insurance in your area visit www.floodsmart.gov.
Mandatory Purchase Requirement:
Pursuant to the Flood Disaster Protection Act of 1973 and the National Flood Insurance Reform Act of 1994, the purchase of flood insurance is mandatory for all federal or federally related financial assistance for the acquisition and/or construction of buildings in Special Flood Hazard Areas (SFHAs). An SFHA is defined as any A or V flood zone on a Federal Emergency Management Agency (FEMA) Flood Insurance Rate Map (FIRM).
The mandatory purchase requirement also applies to secured loans from such financial institutions as commercial lenders, savings and loan associations, savings banks, and credit unions that are regulated, supervised, or insured by federal agencies, such as the Federal Reserve, the Federal Deposit Insurance Corporation, the Comptroller of Currency, the Farm Credit Administration, the Office of Thrift Supervision, and the National Credit Union Administration. It further applies to all loans purchased by Fannie Mae or Freddie Mac in the secondary mortgage market.
Federal financial assistance programs affected by the laws include loans and grants from agencies such as the Department of Veterans Affairs, Farmers Home Administration, Federal Housing Administration, Small Business Administration, and FEMA disaster assistance.
How it Works:
When making, increasing, renewing, or extending any type of federally backed loan, lenders are required to conduct a flood zone determination using the most current FEMA FIRM to determine if any part of the building is located in an SFHA. If the building is in an SFHA, the federal agency or lender is required by law to provide written notification to the borrower that flood insurance is mandatory as a condition of the loan.
Even though a portion of real property on which a building is located may lie within an SFHA, the purchase and notification requirements do not apply unless the building itself, or some part of the building, is in the SFHA. However, lenders, on their own initiative, may require the purchase of flood insurance even if a building is located outside an SFHA. Up to 25% of all NFIP flood losses arise from outside SFHAs (B, C, and X Zones).
Under federal regulations, the required coverage must equal the amount of the loan (excluding appraised value of the land) or the maximum amount of insurance available from the NFIP, whichever is less. The maximum amount of coverage available for a single-family residence is $250,000 and for non-residential (commercial) buildings is $500,000. Federal agencies and regulators, including government-sponsored enterprises, such as Freddie Mac and Fannie Mae, may have stricter requirements.
Manasquan’s Construction & Code Department offers free copies of elevation certificates and flood map information, as well as technical assistance on flood mitigation and protection, flood insurance and financial assistance for property protection. Please contact Manasquan’s Construction & Code Department at (732) 223-0544 ext. 307 or by visiting the second floor of Borough Hall to request information or to schedule a site visit to review flooding, drainage, and sewer problems and receive advice on how to protect your property from flooding.