Buyers Confused About Flood Insurance? Here’s Help
Flood insurance is complicated, so FEMA created a brochure for Realtors to help them answer client questions, such as, “What is an elevation certificate?”
WASHINGTON – The Federal Emergency Management Agency (FEMA) has taken steps to educate Realtors® and the public about the National Flood Insurance Program (NFIP) and the updated way it charges for policies, called NFIP Risk Rating 2.0
Under FEMA’s old NFIP program, a home’s risk-zone location dictated rates. Under the new program, rates can vary home-to-home based on additional factors, such as construction.
To help Realtors explain Risk Rating 2.0, FEMA created a brochure, Flood Insurance For Real Estate Professionals – Help Clients Protect Their Investment. While only an insurance agent can provide a quote for a specific property, the brochure provides an overview of the NFIP program and how flood coverage works.
FEMA also plans future webinars for real estate professionals, but dates and times are not yet finalized.
Highlight of NFIP topics covered in the brochure
- Why should I talk to my clients about flood insurance?
About 40% of NFIP benefits go to people who live outside high-risk flood zones. Hurricane Ian’s impact on Central Florida last year is one example.
- Who can purchase flood insurance?
Anyone in a community that participates in the NFIP program – and most U.S. communities do. Licensed insurance agents can provide more information on any specific community or home.
- How much will flood insurance cost?
This is the big question under Risk Rating 2.0 since it varies by home. The brochure says it varies “depending on the construction date, type and flood risk, among other things.” It suggests real estate agents talks to buyers about a quote for both building and contents coverage.
- How do clients obtain a flood insurance policy?
Clients can visit FloodSmart.gov or call their local insurance agent for more information on purchasing a policy. Note: Only a licensed property and casualty insurance agent can sell NFIP flood insurance. Customers can find a local one using FEMA’s Agent Locator Tool.
- What is an elevation certificate (EC) used for?
An EC may help some people who live in high-risk flood zones, and there are ways to find out if one already exists. FEMA has more EC information online.
- What are special flood hazard areas (SFHAS)?
FEMA has flood maps showing an area’s general risk for flooding. Under Risk Rating 2.0, however, individual home rates will still vary.
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