Lakefront Living – Am I Required to Have Flood Insurance?

If you are a lakefront Buyer, flood insurance can cost anywhere from $1,000 to $3,500 per year! Make sure you understand if the property you’re looking at is considered “inside” a flood zone.

If you are a lakefront Seller, you may not be paying flood insurance now. But then you try to refinance and your lender tells you that you are inside a flood zone. What happened?

FEMA is constantly changing flood zone maps around the Country. This data is used by lenders to determine if flood insurance is required on your lakefront property. Here’s some background:

The Federal Emergency Management Agency (FEMA) applies rigorous standards to develop Flood Insurance Rate Maps (FIRMs). FIRMs are issued by FEMA through the National Flood Insurance Program (NFIP), which reflect federally recognized flood hazard areas. Property owners who own residences within Special Flood Hazard Area (SFHAs) and who have mortgages though a federally insured lending institution are required to have flood insurance per the Flood Disaster Protection Act of 1973.

FEMA uses the most accurate hazard information “available”. However, limitations in the scale or topographic detail of the source maps used to prepare a FIRM may cause small elevated areas to be included in a Special Flood Hazard Area (SFHA) that really may not be. SFHAs are high-risk areas subject to inundation by the base (1-percent-annual-chance) flood. They are also known as 1-percent-annual-chance floodplains, base floodplains, or 100-year floodplains. A few lenders may still require flood insurance based on their lending policies even when a structure lies outside a SFHA.

So how do you check to see if a property is in a flood zone? All FEMA data is on-line and can be accessed from the FEMA Map Service Center.

Do you believe your property is not in a flood zone yet you are being charged for flood insurance? FEMA has a process to dispute their findings called Letters of Map Revision (LOMR).

Still confused? Call us, we can help!

Posted by:

Scott Freerksen “The Lake Guy”
Owner/Broker, Realtor®
Lakefront Living Realty, LLC
Office: (508) 377-7167

Leave a Reply