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Q. Years ago, I had flood insurance, and after 55 years, had no problem, even with street flooding about 250 feet away. I cancelled the policy when I read some fine print that the flood insurance was only valid if my neighbor experienced a flood problem also. Could that possibly be a requirement on flood insurance? It sounds nuts.

— Homeowner

A. We’re glad to know that after all those years, you never had any damage but still have peace of mind knowing that damage would be covered.

Let’s talk about these policies.

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

She said if the mortgage has been paid off, the flood insurance may no longer be needed but maintaining it would be recommended.

The two types of insurance that may cover damages to your property by water are homeowner’s insurance and flood insurance, she said.

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

Any claims filed for damages caused by a flood would not be contingent on if your neighbor had a flood insurance policy, Thomas said.

If during a flood situation, there is damage to your property caused by your neighbor, the neighbor would not be responsible if the damage was the result of “naturally occurring rain and land conditions,” she said.

On the other hand, if the neighbor altered their property in such a way that your property floods, you could have some recourse, she said.

You should contact the National Flood Insurance Program to get more information on the language in your old policy.

Email your questions to Ask@NJMoneyHelp.com.

Karin Price Mueller writes the Bamboozled column for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMoneyHelp. Find NJMoneyHelp on Facebook. Sign up for NJMoneyHelp.com’s weekly e-newsletter.

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