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 (9/09) Questions & Answers About Flood Insurance for Real Estate Professionals

Why should I alert my clients Even then, disaster assistance is often that policy can be assigned to the What is a Special Flood about the importance of a loan that must be repaid, with buyer at the time of closing. Hazard Area (SFHA)? interest, in addition to mortgages, purchasing flood insurance? If the mortgage company requires These are the areas with the Your client may be required to pur- other loans, and credit card debts. flood insurance as a condition of the highest risk for flooding, chase flood insurance. Homeowners Advise your client that flood loan, the lender may escrow flood shown on the Flood Insurance insurance policies do not cover insurance pays even if a insurance premiums – making it easy Rate Maps as Zones A or V. flooding. If the house is in a des- to ensure that your client will not get disaster is not declared. Over a 30-year mortgage, homes ignated Special Flood Hazard Area caught without flood insurance when in these zones have a 26-percent (high risk), the mortgage lender a flood threatens his or her home. chance of being flooded. must, by law, require your client to Who can purchase flood insurance? buy flood insurance as a condition How much will flood for receiving a Federally backed loan. Anyone in a community that par- insurance cost? How will I know if a building ticipates in the NFIP can purchase is in an SFHA? But, even if your client is not building and/or contents coverage, Flood insurance premiums vary, required by law to buy flood insur- with a few exceptions. Coastal Barrier depending upon the date the build- Darkly shaded areas on Flood ance, you should recommend it Resources System (CBRS) areas, ing was constructed and the degree Insurance Rate Maps depict high-risk of risk for flooding. To get a quote, because your client does not need to Otherwise Protected Areas (OPAs), flood areas. Check with your local please contact your insurance agent. live near water to be flooded. Floods and buildings principally below community or, to order copies of If you do not have an agent, you are caused by storms, melting snow, ground or entirely over water are not maps of your area, call 1-800-358- eligible for National Flood Insurance. can contact the National Flood 9616 or go to http://msc.fema.gov. hurricanes, and water backup due to Insurance Program for a referral at inadequate or overloaded drainage 1-800-427-4661. Lenders will notify borrowers if systems, dam or levee failure, new How do clients obtain a flood flood insurance is required as a con- construction, etc. insurance policy? dition of the mortgage loan (National When is the best time to buy Flood Insurance Reform Act of 1994). It is not just high-risk areas that are Your client can purchase National flood insurance coverage? flooded. Nearly 25-percent of all Flood Insurance from private insur- NOW!! There is a 30-day waiting flood insurance claims come from ance companies and agents. In fact, period for flood insurance coverage to Am I legally liable if I do medium- or low-risk flood areas. your client may be able to purchase it with a credit card. Currently, there become effective. If flood insurance is not disclose the fact that Relying on Federal disaster assistance are about 90 insurance companies purchased in connection with a mort- a structure is in a high-risk is not the answer, either. Federal that sell National Flood Insurance gage loan, there is no waiting period. flood area? disaster assistance is available only coverage, in addition to some 60,000 Many states have disclosure laws for if the President declares a disaster. independent insurance agents. real estate professionals that address If the seller of the property has flood all natural hazards, including flood. insurance coverage on the building,