Buyers Beware: Flood Insurance Requirements

After Hurricane Katrina, FEMA altered the national flood maps, pushing the flood zone further out, increasing the insurance pool.  Many of my clients received letters from their mortgage company stating that they now had to pay for flood insurance.  Most of them have owned their homes for many years and had never had any close encounters with flooding.  Now to make matters a little more difficult, Garden State Multiple Listing site has removed the flood insurance field, placing the responsibility of determining flood zone status onto the buyer. 

I believe in transparency, and a seller and their agent should represent the property accurately in the attempt to not waste the buyer’s time.  Many good agents have added comments under the REMARKS section that flood insurance will or will not be required.  A word of caution - if there are no comments, DO NOT assume the property is not in the flood plan.  Your real estate agent should have access to flood maps and can make an initial determination.  One can also go to First American Flood Data Services or request a flood certification from your real estate attorney.

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