Is Buying in a Floodplain Crazy?

[Michael Foster]

Based on the numbers a house I am looking at is a great deal.  But it is in a flood plain and will require flood insurance.

Is buying a house in a floodplain crazy?  Should I run away?

[Margie Fuller]

@Michael Foster Having worked in insurance, I may be able to help out here. Flood insurance is different than hazard insurance, in that, flood insurance is guaranteed. It's backed federally. Your property could flood every single year, and they will back up the policy (at least until someone on a governmental level messes that up). Hazard insurance is provided by the company that you have insurance with, so if you continue to have claims every year, they will typically cancel your insurance at the worst or charge what feels like a penalty for having used the policy at best. So my suggestion is the same as the others here, if it's good on the numbers, go for it as long as you carry flood insurance.