Home Mortgage loan What you need to know when buying a home in a flood zone – Forbes Advisor

What you need to know when buying a home in a flood zone – Forbes Advisor


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There is a saying: where it can rain, it can flood. So, for homebuyers, the question shouldn’t be, “Can my house be flooded?” Instead, you should ask yourself: “What is the risk of flooding?” “

Naturally, the risk of flooding is increased if you buy a house along the coast or near a large body of water (rivers and lakes), but even if your dream house is not a property. by the sea, it could be in a high-risk flood zone.

It’s important to know how prone to flooding your home is, as it could mean higher insurance costs, more unscheduled appraisals and repairs when a storm hits.

Here’s what you need to know about flood zones before buying a home.

What is a flood zone?

All areas are prone to flooding, but some are more at risk than others. Depending on the level of threat your property is exposed to (low, moderate, or high risk), you may face higher insurance premiums as well as potential damage to your home.

Homebuyers can check the Federal Emergency Management Agency (FEMA) website for flood maps in their neighborhoods. The maps provide a risk calculation based on past events and flood patterns.

According to FEMA, there is no such thing as a “safe zone,” but buyers can see how prone their property is to flooding using flood maps. Areas with a flood risk of 1% or more are considered high risk. This 1% chance flood is also known as the base or 100 year flood. During the life of a 30-year mortgage, these areas have at least a one in four chance of being flooded.

FEMA has designated two main types of flood zones: Special Flood Hazard Areas (SFHA) and Non-Special Flood Hazard Areas (NSFHA).

Special Flood Risk Zones (SFHA):

  • These areas start with the letters A or V
  • They have at least a one in four chance of being inundated on a 30-year mortgage
  • National Flood Insurance Program (NFIP) floodplain management regulations must be enforced in these areas
  • Property in SFHA must have flood insurance

Non-special flood risk zone (NSFHA):

  • These areas include B, C, X Pre- and Post-FIRM
  • They are considered low to moderate risk flood zones.
  • They are not in immediate danger of flooding caused by overflowing bodies of water or heavy rains
  • According to FEMA, despite their low to moderate risk, one in four flood claims occurs in these areas

Some properties must have flood insurance

If you are using a government guaranteed mortgage (this includes Federal Housing Administration (FHA), Veterans Affairs (VA), and United States Department of Agriculture (USDA) loans) for a property in a high risk flood area, you will be required to obtain flood insurance.

For buyers buying property outside of high-risk areas, lenders may still require flood insurance to secure a mortgage, even if it’s not a federal obligation.

Two types of flood insurance available

First of all, it’s important to note that standard home insurance policies and tenant insurance policies do not cover flooding. You will need to purchase a separate flood insurance policy.

There are two basic types of flood insurance you can get: the government-backed option called the National Flood Insurance Program (NFIP) or private flood insurance.

National Flood Insurance Program (NFIP)

Consumers can get NFIP flood insurance if their community participates in the program. Currently, NFIP is available in 23,000 communities.


  • The advantage of NFIP assurance is that it is backed by the government
  • Meets minimum requirements for government guaranteed mortgages

The inconvenients

  • For people with expensive real estate or expensive personal effects, the downside of NFIP insurance is that the maximum coverage may be too low.
  • The NFIP will pay up to $ 250,000 for damage to your home and an additional maximum of $ 100,000 for items inside the home, such as clothing, furniture and electronics, freezers ( and the foods they contain) and other valuables.
  • There is no coverage for alternative lifestyles

Private flood insurance

Private flood insurance is available for people who do not live in participating NFIP communities or who want more extensive insurance coverage. The downside to private flood insurance is that the insurance company can terminate your policy.


  • Policyholders can obtain insurance up to 100% of the value of the property and personal effects inside the house
  • Alternative coverage for living expenses is available, depending on the policy and insurance company

The inconvenients

Is Flood Insurance Worth It?

Even if you don’t have to have flood insurance, it’s worth considering the risks before deciding to do without.

About 30% of all flood insurance claims come from households in low to moderate risk areas. Additionally, according to FEMA, just one inch of water can cause significant damage to your property.

Depending on where you live and what your policy covers, flood insurance can start at $ 80 per month on average. There may also be additional insurance assessments per year depending on whether you are in an area prone to flooding and water damage.

Like most insurance plans, if you go for a higher deductible, you will pay less for the insurance. However, if you file a claim, you will have to pay the difference in damages out of pocket.


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