National Flood Insurance Program. Questions & Answers About Flood Insurance for Real Estate Professionals. Why should I talk to my clients Who can purchase about flood insurance? flood insurance? If the house is in a designated Special Anyone in a community that partici- Flood Hazard Area (high-risk area), pates in the NFIP can purchase building then federally regulated or insured and/or contents coverage, with few lenders must, by law, require your client to buy flood insurance as a condition exceptions. Some Coastal Barrier of their loan. Not only may your client Resources System (CBRS) areas, be required to purchase flood insur- Otherwise Protected Areas (OPAs), and ance, but homeowners’ insurance buildings principally below ground or policies typically do not cover floods. entirely over water may not be eligible Also, it is good business that your for NFIP flood insurance coverage. client protect their new investment. If your client is not required to buy How do clients obtain a flood flood insurance, it is good to recom- insurance policy? mend it. A home does not need to Your client can purchase NFIP flood be near water to flood. Floods are caused by many perils including insurance from the NFIP Direct or any storms, melting snow, hurricanes, one of the many companies writing water backup due to inadequate or and servicing flood insurance on behalf overloaded drainage systems, broken of FEMA. NFIP flood insurance can water mains, and changes to land only be purchased through a licensed as the result of new construction. property and casualty insurance agent. It is not just high-risk areas that The NFIP flood insurance rules and flood. In fact, more than 20 percent of all NFIP flood claims come from regulations are the same, regardless outside mapped high-risk areas. of where the coverage is purchased, and therefore the premium for an Relying on Federal Disaster Assistance individual risk should also be the same. is not the best answer. Availability of Federal Disaster Assistance is dependent If the seller of the property currently has upon a Presidential disaster declaration. an NFIP flood insurance coverage on the NFIP flood insurance responds to building, that policy can be assigned to covered losses even though a disaster the buyer at the time of property closing. declaration has not been made. If the mortgage company requires flood Federal Disaster Assistance is often a insurance as a condition of the loan and loan that must be repaid with interest, in addition to existing mortgages, the borrower has an escrow account other loans, and debts. Generally, NFIP for other insurance premiums, the flood insurance claim payments do lender must escrow flood insurance not need to be paid back. premiums, too — making it easy to ensure that your client will not What is a Special Flood Hazard get caught without flood insurance Area (SFHA)? when it is needed the most. These are the areas with the highest risk for floods and are shown on Flood How much will flood Insurance Rate Maps as Zones, beginning insurance cost? with the letter A or V. Over a 30-year Flood insurance premiums vary, mortgage, homes in these zones have a depending upon the date the building 26-percent chance of experiencing a flood. was constructed and the degree of risk for flooding. To obtain a quote, please How will I know if a building is in have your client contact their insurance an SFHA? agent. If the buyer does not have an Your clients can check with their local agent, they may call 1-888-435-6637 for community or visit www.floodsmart.gov assistance in locating an agent selling to learn more about their flood risk. NFIP flood insurance in their area. Copies of flood maps can be viewed and downloaded from http://msc.fema.gov. In order to obtain a flood insurance Lenders will notify borrowers if flood quote, your client may need to obtain insurance is required as a condition an Elevation Certificate (EC). Do you of their mortgage loan. know where an existing EC may be found? Try the local building permit or Am I legally liable if I do not planning and zoning office, the current disclose the fact that a structure owner, or flood insurance agent. If all is in a high-risk flood area? else fails, the buyer may need to purchase Many states have disclosure laws a new EC from a licensed land surveyor, for real estate professionals that engineer, or architect. Should you or address all natural hazards, including your client need more information flood. Check with your local Board about the EC, how it is used, and why it of Realtors for disclosure laws. is needed, please visit the FEMA media library at the following website: You can better help your client under- http://www.fema.gov/media-library/ stand flood risk by learning more assets/documents/32330. about it yourself. Go the extra mile. Visit FEMA’s consumer website at www.floodsmart.gov to learn more When is the best time to buy flood insurance coverage? about flood risk and NFIP flood insurance. Be sure to have your Now! There is typically a 30-day waiting client complete the “Flood Risk Profile period from the time of policy applica- and the Cost of Flooding tool”! tion and payment to the policy effective date. However, there are exceptions to this rule. For example, if the initial pur- chase of NFIP flood insurance is done so in connection with a loan closing, there is no waiting period. For more information about NFIP flood insurance, contact your insurer or agent, or call, 1-800-427-4661.

To locate an insurance agent selling flood insurance in your area, call, 1-888-435-6637.

If you are deaf/hard of hearing or have a speech disability and use relay services, call 711 from your TTY or use VRS to call, 1-800-638-6620

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