Is this flood insurance requirement up to standard?

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Q. Years ago I had flood insurance, and after 55 years I haven’t had any problems, even with street flooding at about 250 feet. I canceled the policy when I read in the fine print that the flood insurance was only valid if my neighbor also had a flood problem. Could this be a flood insurance requirement? It sounds crazy.

– Owner

A. We are happy to know that after all these years you have never had any damages, but you still have peace of mind knowing that the damages would be covered.

Let’s talk about these policies.

In a high-risk flood zone, flood insurance is mandatory if there’s a mortgage on the property, said Betty Thomas, licensed financial consultant and certified financial planner with Peapack Private Wealth Management in New Providence.

She said that if the mortgage has been paid off, the flood insurance may no longer be necessary, but it would be advisable to maintain it.

The two types of insurance that can cover water damage to your property are home insurance and flood insurance, she said.

“If your property has been damaged by water from a source in your home, homeowner’s insurance should be able to cover it,” she said. “If the water damage is from an outside source of rising water, however, home insurance may not be enough. In this case, it would be flood insurance, even if the damage was caused, at least in part, by a neighbour.

Any claim filed for flood damage wouldn’t depend on your neighbor having a flood insurance policy, Thomas said.

If during a flood your property is damaged by your neighbor, they would not be liable if the damage was the result of “rain and natural ground conditions,” she said.

On the other hand, if the neighbor has altered their property in such a way that your property is flooded, you may have recourse, she said.

You should contact the National Flood Insurance Program for more information on the language of your old policy.

Send your questions to [email protected].

Karin Price Mueller writes the Bamboos column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Register for NJMoneyHelp.comit is weekly e-newsletter.

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