When my husband and I bought our house in 2009, we choose an area that is more or less halfway between my job and his. Unfortunately, it's a town that's prone to flooding. There was a rather bad--the proverbial 100-year flood--flood in 2008 spelled disaster for many in our town. The house we bought sits on slightly higher ground and fared just fine, but several of our neighbors didn't fare so well. A difference of 5 to 10 feet of elevation in our area makes a world of difference. We had some flooding this past weekend in our neighborhood and we, again, fared just fine thanks to a very busy sump pump and our extra elevation.

But here's a picture from 2008 of what it looked like to the south and west of our house in a lower lying area:

http://farm4.static.flickr.com/3049/...e3f594fc85.jpg

I had previously been working on the incorrect assumption that our mortgage lender would have forced us to get flood insurance if we were eligible for it in the first place (not everyone can buy federal flood insurance, and that's the only kind of flood insurance out there). Wrong. You're only required to get flood insurance if your loan is federally backed, e.g, FHA, VA. Ours is not. So, while we weren't required to get flood insurance, we are eligible for it--at a premium of about $1600 a year. So, now my husband and I need to decide whether to carry it.

I can swallow the cost, although it pains me to do so. What keeps stopping me in my tracks is that it's federal insurance. I may work for the Feds, but when I hear how other disasater programs are run, I have to wonder whether they pay out in an expeditious manner when the claim is against the federal flood insurance program. Will I pay close to $2000 a year only to be thwarted with red tape and bureaucracy? Is that still better than the alternative?

Does anybody carry flood insurance and, if so, have you ever made a claim? How was the claim handled? Anything else I should know? Any other thoughts?