January 17, 2006 > Letter to the Editor: Water, water everywhere
Letter to the Editor: Water, water everywhere
I read with interest your article Water, water, everywhere, by Todd Griffin, in your January 3rd issue. There is, however, one piece of inaccurate information included. You state therein that residents (within a Special Flood Hazard Area) are required to have flood insurance.
That is not entirely correct. Under federal law, federally-insured lenders must require mortgagees of properties within Special Flood Hazard Areas to carry federal flood insurance where available. The burden of compliance falls on lenders, not directly on borrowers.
If a property owner has no mortgage, he/she is not required to carry flood insurance. If a lender is not federally-insured, it is not required to compel the borrower to carry flood insurance, thought it may as a matter of policy. Also, federal flood insurance is only available in local communities that are participants in the National Flood Insurance Program. There are some cities/counties that are non-participants; in these cases, federal flood insurance is not available to residents at all.
Dear Mr. Lucey:
Thank you for your clarifying comments. Alameda County and the cities within the TCV readership area do participate in the National Flood Insurance Program (NFIP). You are correct that compliance with the program is the responsibility of the lender, though the cost of NFIP coverage is typically passed directly from the lender to the homeowner. As you point out, those fortunate enough to own their homes free and clear have no obligation to carry flood insurance. This should have been stated in the article. Again, thank you for providing this information.