Know Your Risk
Know Your Role
Real estate, lending, and insurance professionals play an important role in reducing the impact of flooding in the communities they serve.
Know Your Risk
As a real estate, insurance or lending professional, your clients rely on you to inform them of potential risks to their current or prospective home, including flood risk. Make sure you understand the risk from flooding in areas you serve, if flood maps will be changing in the area and what this means for flood safety and insurance requirements.
View the effective flood map for your location by visiting the FEMA Flood Map Service Center. Read the Product Overview page for different viewing options through Google Earth and the FEMA GeoPlatform.
Know Your Role
As the professionals that home and business owners look to for sound advice when it comes to matters dealing with their largest financial investment, their home or business, it is important for you to understand flood risk in areas you serve, the impact of upcoming map changes and how these may affect your clients.
Congress mandates that federally regulated or insured lenders require flood insurance for all buildings located in a Special Flood Hazard Area (SFHA) with a federally backed loan. Because insurance agents agree to sell and service flood insurance to property owners, both insurance agents and lenders play an important role in this process.
Real Estate Agents
- Help Protect Your Customer’s New Home provides information you should know about flood risk and flood insurance requirements and what to say to clients. Give the Protect Your Home postcard directly to your clients to help them talk with their insurance agent about flood insurance.
- Some states and local communities have specific disclosure requirements about whether a property is located in a flood zone. Contact your local realtors’ association to learn more.
- Buildings in Special Flood Hazard Areas (SFHAs) must be built to minimize future flood damage. At a minimum, residences must be built so that the lowest floor (including basement) is elevated to or above the Base Flood Elevation. Other requirements may apply in coastal areas. Make sure your clients know this if they are considering developing land in the SFHA. Also be aware that existing buildings in the SFHA not constructed in accordance with such standards will carry high flood insurance premiums.
Insurance Industry Professionals
- Make sure you are including accurate flood hazard zone classifications in all insurance rating and property disclosure forms for commercial and residential properties. FEMA’s Flood Map Service Center website contains the latest flood maps available and includes search options by address.
- Get information about upcoming training, answers to common client questions and resources about writing policies, managing claims and marketing your business through FloodSmart’s Agent website.
- Significant changes are occurring to the NFIP and flood insurance requirements as a result of recent legislation. Make sure you understand how these changes may impact your clients.
Lending Industry Professionals
- You, as a lender, must inform loan applicants of any flood insurance requirements for a property. You should also make sure people are aware of any upcoming changes to flood insurance requirements as a result of map changes underway in the community.
- Remember that it is your role as a lender to enforce the federal flood insurance requirement for properties with federally backed loans. Failure to do so will result in penalties including significant fines.
- The NFIP offers training for lenders on a variety of topics. To receive advance notice when new training sessions are scheduled, sign up for NFIP Training Updates.
In cases when a lender’s flood zone determination is different from that of an insurance agent, FEMA recommends that the more hazardous flood zone be used for rating, unless the building qualifies for the NFIP Grandfather Rules or is eligible under the 2-Year Preferred Risk Policy (PRP) Extension.