What Determines If You Have to Pay Flood Insurance?

Your mortgage company determines whether you must buy flood insurance.

Your mortgage company determines whether you must buy flood insurance based on the flood zone that your property resides within and whether your community participates in the National Flood Insurance Program (NFIP). Your lender references a Federal Emergency Management Agency (FEMA) map to determine the flood zone.

Flood Insurance Rate Maps

FEMA conducts flood hazard analysis and creates Flood Insurance Rate Maps, or FIRMs, to illustrate its findings. It uses the date to categorize areas into flood zones.

High Risk Zones

In NFIP participating communities, owners of property in all numbered and lettered A zones have a mandatory flood insurance purchase requirement. Properties in these zones falls within the 100-year floodplain and have a 26 percent chance of flooding during the life of a 30-year mortgage.

Coastal High Risk Zones

Owners of property in all numbered and lettered V zones also have a mandatory flood insurance purchase requirement. Properties in these zones lie in coastal areas with a 26 percent chance of flooding during the life of a 30-year mortgage and an additional hazard associated with storm waves.

Other Zones

Those with property in moderate, low and undetermined risk areas have the option to purchase flood insurance, but it is not mandatory. These zones include B, C, X, and D.

References

• Federal Emergency Management Agency: Definitions of FEMA Flood Zone Designations
• Floodsmart: Flooding and Flood Risks