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What To Know Before Purchasing A Home That Requires Flood Insurance

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 | February 6, 2020

According to National Geographic, flooding is the most common natural disaster—and with a flood comes destruction. Floods can happen all over the country, even in areas that were previously considered low risk for flooding. Homeowners everywhere could be at risk for flooding and water damage due to weather or other unforeseen events.

If you’re purchasing a home, you want to do your due diligence when it comes to the house’s flood insurance needs. Your new home’s risk of flooding could impact your monthly insurance expenses—and affect the health and safety of your home and family.

What do you need to know about flood insurance before buying a home?

1. Standard homeowners coverage doesn’t cover flood.

Most standard homeowners policies do not cover flood. Your homeowners insurance will usually cover water damage, like from a burst pipe or broken tub. But it generally does not cover flooding from natural disasters, like hurricanes or rainstorms, or local flooding issues, like a clogged sewer pipe or construction malfunction.

You’ll have to buy flood insurance separately from your homeowners policy (you can purchase them from the same company, though.) This means you’ll be paying an additional cost on top of your homeowners insurance to pay for flood. The cost of flood insurance is dependent upon your home’s risk for flood, which is why you want to be aware of your flooding hazards (and mitigation potential) before buying a home.

Buying a home costs more than just a monthly mortgage and utilities. You’ll have to include all the different homeowners policies as well, like the standard policy as well as additional flood and earthquake.

Ask your insurance agent these 11 questions to see if you need flood insurance alongside your standard homeowners policy.

2. You want to know the home’s flood risk and flood zone.

FEMA has mapped out most counties in America with the area’s flood risk. Knowing your new home’s flood zone will give you a sense of your risk and your associated insurance costs.

Do a quick search on FEMA’s flood map to see your potential home’s zone.

Here’s a quick guide to understanding risk zones:

  • A and V = high risk [insurance required]
  • D = undetermined risk
  • B and X (shaded) = moderate risk
  • C and X (not shaded) = minimal flood risk

Note: Shaded X zones usually show that there is a manmade barrier, like a dam, to help minimize flooding.

Recommended read: High-risk flood insurance guide

3. High-risk zones require insurance and an elevation certificate.

The government requires that homes in high-risk flood zones have flood insurance, especially if you have a federal mortgage lender.

Your flood insurer will likely require an elevation certificate, which shows your home’s elevation in relation to the height of possible floodwaters. This tells the insurer your building’s location and characteristics, so they can determine your flood risk. This risk level will determine how much your flood premium will cost.

If you discuss flood with the seller before buying, the seller might pick up the cost of paying for an elevation certificate. If you don’t do your due diligence before buying, you’re responsible for the EC.  

Read: How to get a flood elevation certificate

4. Flood insurance is still recommended for low risk zones.

Weather and nearby bodies of water aren’t the only risks for flooding. Poor diversion from new construction, a clogged storm drain, or even changes in nearby plots can all cause floods. You also never know when torrential rain could cause a shock to the local system and cause flooding.

No one is immune to flood. Even Death Valley, America’s driest land, has seen dangerous flash floods in recent years. Dry deserts, like Las Vegas, actually see some of the worst floods because these areas don’t have the infrastructure to handle heavier rains.

That’s why it’s highly recommended that every homeowner considers flood insurance. Flood insurance is inexpensive for low-risk homes, but it can do a lot to protect your home from devastating floods and associated costs.

5. You should inquire before you buy.

Sellers are obligated to disclose any previous floods or draining issues. Still, it doesn’t hurt to actively inquire about the flood zone and previous risks.

You can ask your real estate agent, lender, or insurance agent to look into the property’s flood status and claims history before closing. This can give you a good idea about the risk you’ll be assuming before buying.

6. Some lenders require prepayment for flood insurance.

Even if your home is considered low or moderate risk, your mortgage lender may still require flood insurance. Lenders know just how prevalent and serious floods are, so they want their investment protected. So you’ll want to talk to your mortgage representative before buying your home to see their requirements for flood insurance.

Some lenders may also require you to prepay the first year for flood insurance. This can be an additional upfront cost that you’ll need to consider when purchasing your home.

7. You can choose private or public flood insurance.

Most people only think of FEMA’s NFIP program, the government’s flood insurance policy. You don’t have to buy flood insurance through FEMA, though. In fact, private companies can be cheaper and more comprehensive if you’re looking to protect your home against flood.

Get quotes for flood insurance for your new home now.

8. Flood insurance isn’t always expensive.

Even though flood insurance is an additional cost on top of your standard homeowners insurance, the price may not be as shocking as you may think. The cost of your premium is proportionate to your home’s risk for flood. That’s why you should always inquire about your risk before buying—a higher flood risk means a higher insurance cost over the lifespan of your home.

Thankfully, if your home is in a flood zone, there are ways you can reduce your risk of flood—and lower your costs in the process.

9. There are ways to mitigate risk and minimize costs.

If you’re in love with a home that’s a high flood risk, you don’t have to pass on it! There are ways you can reduce your risk with just a few minimal repairs. You can make sure your gutter runoff doesn’t collect near the house and clean out pipes, seal off basement walls or install floodwalls, or you can make structural changes like elevating the house on stilts to keep it away from water.

Check out these 10 ways to save on flood insurance.

Talk to an InsuraMatch advisor to see what updates or changes could reduce your risk and premium costs, give us a call today at (844) 819-2230.

Get flood insurance

Whether you’re high or low risk, everyone has some risk for flood. The best thing you can do for your home and family is to stay aware and stay proactive. Ask questions about your new home, and don’t be afraid to include your insurance agent in the process!

Our insurance advisor are available to help you do your due diligence on a new home to help determine your risks and premiums—and give you awesome tips on how to reduce your risk.

Call us today to start chatting about your insurance needs!


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