New Massachusetts Flood Zone Insurance Notice

As of November 20, 2014, this notice will be given to the owner of a house that has lender-required flood insurance:

New Flood Maps from FEMA“Please note that the flood insurance we are requiring you to purchase will only protect your creditor’s or lender’s interest in your property. Massachusetts law prohibits a creditor or lender from requiring you to purchase flood insurance in excess of the amount of your principal mortgage and, in the case of a home equity line of credit, home equity loan or second and subsequent mortgage, the full value of the credit line, outstanding principal on the equity loan or second or subsequent mortgage on that property at the beginning of the year for which the policy will be in effect.  The insurance may not be sufficient to pay for many needed repairs after a flood and may not compensate you for your losses in the property due to the flood.  If you wish to protect your home or investment, you may want to purchase more flood insurance than the amount we are requiring you to buy.”

English translation from the Legalese:

The insurance you are buying covers the amount that you still owe your lender. It does not cover the cost of your repairs. Nor does it protect you from equity loss.

It is a really good idea to talk to your insurance agent. If there is any chance that your house is subject to major flooding, you are probably under-insured. 

The full text of Chapter 177 can be read here.