Flood Insurance: What’s the Law?

Thank you to HomeBridge Financial Service and Branch Manager, Brandon Ehrlich, for providing this easy-to-understand capsule on Flood Insurance.

FEMA’s National Flood Insurance Program issues between 90 to 99 percent of all the United States’ residential flood policies. Under federal law, flood insurance is mandatory when buying or building a residence in a high-risk flood area.

If a property is not located in a high-risk area federal law does not require flood insurance. Lenders may still require flood insurance for properties in moderate-to-low risk areas. After all, one-in-five claims comes from these moderate-to-low risk areas. 

When FEMA revises flood zone maps, properties inside newly designated flood zones are required to purchase flood insurance. Lenders will notify prospective homeowners that flood insurance will now be required as a condition of closing the mortgage. 

Flood zone maps and more information for homeowners is available from FEMA at msc.fema.gov. We hope you find this information helpful and, as always, we welcome any feedback, questions, or comments.