For more information about the National Flood Insurance Program NFIP and flood insurance, call 1-800-427-4661 or contact your Questions & Answers insurance company or agent. About Flood Insurance For an agent referral, call 1-888-435-6637 for Real Estate TDD 1-800-427-5593 http://www.fema.gov/business/nfip Professionals http://www.floodsmart.gov

F-435 (8/09) Questions & Answers About Flood Insurance for Real Estate Professionals

Why should I alert my clients Advise your client that flood insurance insurance premiums — making it easy How will I know if a building about the importance of pays even if a disaster is not declared. to ensure that your client will not get is in an SFHA? purchasing flood insurance? caught without flood insurance when Lenders will notify borrowers if flood a flood threatens his or her home. Your client may be required Who can purchase insurance is required as a condition to purchase flood insurance. flood insurance? of the mortgage loan (National Flood Insurance Reform Act of 1994). Homeowners insurance policies do Anyone in a community that How much will flood not cover flooding. If the house is in a participates in the NFIP can purchase insurance cost? Check with your local community designated Special Flood Hazard Area building and/or contents coverage, Flood insurance premiums vary, or, visit www.floodsmart.gov, to determine your risk. Copies of (high risk), then federally regulated or with a few exceptions. Some Coastal depending upon the date the building maps can be downloaded at insured lenders must, by law, require Barrier Resources System (CBRS) areas, was constructed and the degree of risk http://msc.fema.gov. your client to buy flood insurance as a Otherwise Protected Areas (OPAs), and for flooding. To get a quote, please condition for the loan. buildings principally below ground or contact your insurance agent. If you do entirely over water are not eligible for If your client is not required by law not have an agent, you can contact the Am I legally liable if I do National Flood Insurance. to buy flood insurance, you should National Flood Insurance Program for not disclose the fact that recommend it. A home does not a referral at 1-888-435-6637. a structure is in a high-risk need to be near water to be damaged How do clients obtain a flood flood area? insurance policy? by a flood. Floods are caused by When is the best time to buy Many states have disclosure laws for storms, melting snow, hurricanes, Your client can purchase National flood insurance coverage? real estate professionals that address water backup due to inadequate or Flood Insurance from private all natural hazards, including flood. overloaded drainage systems, broken insurance companies and independent Now! There is a 30-day waiting Check with your local Board of water mains, and new construction. insurance agents. In fact, your client period for flood insurance coverage Realtors for disclosure laws. may be able to purchase it with a to become effective. If flood It is not just high-risk areas that are credit card. Currently, there are about insurance is purchased in connection flooded. On average 25 to 30 percent 90 insurance companies that sell with a mortgage loan, there is no of all flood insurance claims come National Flood Insurance coverage as waiting period. from medium or low-risk flood areas. well as nearly 60,000 independent insurance agents. Relying on Federal disaster assistance What is a Special Flood is not the answer. Federal disaster If the seller of the property has flood Hazard Area (SFHA)? assistance is available only if the insurance coverage on the building, These are the areas with the highest President declares a state of disaster. that policy can be assigned to the risk for flooding, shown on the Flood buyer at the time of closing. Even then, disaster assistance is often a Insurance Rate Maps as Zones A or V. loan that must be repaid with interest, If the mortgage company requires Over a 30-year mortgage, homes in in addition to mortgages, other loans flood insurance as a condition of the these zones have a 26 percent chance and credit card debts. loan, the lender may escrow flood of being flooded.