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Tag: Flood Insurance

  • Selling a House in a Flood Zone: Turn Challenges Into Competitive Advantages

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    If it’s time to sell and your house is in a flood zone, you may be concerned about getting the best price for your home. The good news is that there are plenty of buyers interested in purchasing properties regardless of the flood zoning. In this article, we’ll review everything you need to know if you’re selling your home in a flood zone, from insurance to mitigation to pricing strategies.

    The basics of FEMA flood zone classifications and the implications of each designation

    FEMA (the Federal Emergency Management Agency) is responsible for evaluating flood zones in the United States. As you may already know, these designations can have a significant impact on your insurance premiums and the way you’ll need to market your house for sale.

    If you’re planning to sell your house, you should obtain a current flood zone certification, understand their specific zone’s implications, and be prepared to provide detailed information about flood risks, insurance requirements, and any mitigation measures implemented to potential buyers. If you don’t already know what the designation is for your property, you can look it up on FEMA’s website. 

    FEMA designations in alphabetical order and their implications for homeowners 

    Zone A is a high-risk flood area with a 26% chance of flooding during a 30-year mortgage. Properties in this zone require mandatory flood insurance for properties with federally backed mortgages. Within Zone A, there are several subcategories like AE (with a defined base flood elevation), A1-A30 (specific elevation zones), AO (shallow flooding), and AH (flood depths between one and three feet). Properties in Zone A are also classified as Special Flood Hazard Areas.

    Zone B and Zone C were previously used for areas with reduced flood risk. These are now largely replaced by Zone X.

    Zone D indicates undetermined flood risks, which can complicate property sales as it suggests insufficient data to definitively assess flood potential.

    Zone V is a coastal high-risk area with additional challenges, typically found in coastal regions. Houses with this designation have additional insurance requirements and building restrictions due to potential storm surge and wave action. Insurance premiums in Zone V are the highest of all the flood zones, and houses in this zone have more restrictive construction requirements. Properties in Zone V are also classified as Special Flood Hazard Areas.

    Zone X represents moderate to low-risk areas, divided into X (shaded) with a moderate flood risk and X (unshaded) with minimal flood risk; while flood insurance isn’t mandatory in these zones, it’s still recommended. 

    Special Flood Hazard Area (SFHA) is a federally designated high-risk zone where the annual chance of flooding is 1% or greater, commonly known as the “100-year flood zone,” which requires mandatory flood insurance for properties with federally backed mortgages. This classification is a broader designation that includes both Zone A and Zone V. If your property is in Zone A or V, your property is automatically also categorized as SFHA. Another way to think of it is that Zone A is a subcategory of SFHA that is located inland and Zone V is a subcategory of SFHA that is coastal.

    Understanding base flood elevation (BFE) and elevation certificates (EC)

    Base Flood Elevation (BFE) is the calculated height of floodwaters expected during a 100-year flood event. It is the critical benchmark for determining flood risk, insurance requirements and building standards for a specific property. 

    Properties located below the BFE typically require higher insurance rates. Some of them are also mandated to complete structural modifications like elevated foundations or first-floor living spaces above the designated flood level. The BFE provides potential buyers with a precise understanding of flood risk. When selling a home in a flood zone, the BFE is a crucial factor in determining sale prices. It will greatly influence insurance premiums and the costs for potential future mitigation measures.

    The Elevation Certificate (EC) is a document that provides the elevation information for a specific property in relation to the BFE. It certifies the precise elevation of the building’s lowest floor, critical systems, and other key elements related to the BFE.

    Think of it this way: BFE is the standard flood level, while the Elevation Certificate documents how a specific property relates to that standard flood level. 

    Impact of flood zone designation on property values when selling

    Different flood zone classifications can significantly reduce property values, with high-risk zones (such as FEMA’s Special Flood Hazard Areas) potentially decreasing home values by 10-20% compared to properties in lower-risk zones. The more frequent and severe the flood risk, the more dramatic the negative impact on market value, with potential buyers factoring in increased insurance costs and potential property damage. 

    What to do before you put your flood zone property on the market

    Step 1: Flood assessment and documentation 

    Cost: $500 – $2,500

    Timeline: 2 – 6 weeks

    To start with, you’ll need to gather a fair amount of documentation about the flood and insurance history of your property. If you have already prepared this information, now is the time to pull it out and go through everything. You’ll need the following information and official documentation:

    • Current flood zone classification. You can get this from FEMA’s website or contact FEMA directly through their Flood Map Service Center. Alternatively, you could request a Flood Zone Determination from your local county assessor’s office.

    • Flood insurance history and claims record. You can get this directly from your insurance company. Request a comprehensive claims history or a Comprehensive Loss Underwriting Exchange (CLUE) report. You could also contact the National Flood Insurance Program (NFIP) at 1-800-427-4661.

    • Professional flood risk assessment. You have a number of options for how to obtain this information. You could hire a local certified flood risk consultant, professional surveyor, or engineering firm that specializes in flood risk assessment. You could also reach out to your local university’s geography or environmental science departments for recommendations and additional information.

    • Historical flood data for the property. Try to collect flood event records, watershed and/or drainage area maps, local climate and precipitation data, or topographical maps. Sources and resources for this information include FEMA’s NFIP database, local watershed management districts, historical property records, or the archives of your neighborhood association.

    • Elevation certificate. The EC provides precise documentation of the property’s base flood elevation, helps determine accurate flood insurance rates, serves as a critical disclosure document for potential buyers, and can potentially demonstrate the property’s flood resilience or guide necessary mitigation efforts that could improve the home’s marketability and value.

    Step 2: Consider making recommended property updates to mitigate flood risk (if applicable)

    Cost: Varies by flood zone and property condition

    Timeline: Varies by scale of updates

    If you’re planning to sell a house in a flood zone, one of the best ways to increase your asking price is to start making any recommended flood mitigation updates to your property. FEMA has information for homeowners who are retrofitting a current home, as well as guidelines for residential buildings such as townhomes that can’t be elevated. The extent of these updates will vary depending on your individual house and property. Recommended modifications range from structural updates like raising the elevation of your living spaces to smaller efforts such as upgrading your outdoor drainage system. This will also help to keep flood insurance premiums down. 

    The documentation you have collected will include recommendations for updates that are appropriate to your location and flood zone. Common targeted improvements include items such as elevating electrical systems, installing flood vents, applying waterproof sealants, creating proper drainage systems, and potentially raising the home’s foundation. Contact your insurance provider or FEMA for specific recommendations based on your home and location.

    Step 3: Get to know your insurance policy and gather information about insurance options

    Cost: $200 – $500

    Timeline: 2- 4 weeks

    Start by getting to know the NFIP requirements for your community. You’ll find them in the FEMA Flood Maps Service Center. You’ll need to know what the mandatory insurance requirements are and if there have been any recent changes to the local flood maps. Determine whether there is community participation in NFIP and note any coverage limits or restrictions for your property. Familiarize yourself with the regulations around transferring insurance policies.

    Next, contact your current insurance provider and request a complete policy documentation package and a detailed claims history report. You’ll need the following information:

    • Full copy of current flood insurance policy

    • Policy number and effective dates

    • Coverage limits and types of coverage

    • Premium amounts

    • Deductible information

    • Claims history

    • Is insurance policy transferable to a new owner?

    Finally, we recommend you do some research to estimate the insurance costs to a potential buyer. This will help you price the property for sale and may play a role in price negotiations.

    Armed with basics such as the EC, BFE, current zone classification, and historic flood risk data, reach out and get insurance quotes from multiple providers. Try to get an insurance cost estimate letter from them if possible. Sellers in high-risk flood zones will need to go through the NFIP to purchase a flood insurance policy, but if your home is in a low-risk area you may want to explore private insurance options as well. 

    Disclosure and other legal requirements for houses in a flood zone

    It is critical that you follow all state and federal disclosure requirements when selling your house. Failure to do so may result in legal action being taken against you. If you’re working with a real estate agent who has experience selling houses in a flood zone, they will know the local disclosure regulations and can help you navigate the process. 

    Pricing to sell your house in a flood zone

    Pricing your house correctly is one of the most important things you can do when selling in a flood zone. Here are some of the things you should be considering when determining the sale price:

    • SFHA vs non-SFHA Category Designation matters here. If your property is located in a Special Flood Hazard Area or is in Zone A or Zone V, you will likely be looking at a lower sale price. Buyers are understandably more wary about purchasing a home in these areas. A recent study by Stanford University found that houses in a flood zone sold for 2% below their value.

    • Competitive market analysis Whether you’re working with a real estate agent or selling yourself, it’s important to carefully evaluate comparable sales. Be sure to take flood zone designations, historical flooding incidents, and local mitigation infrastructure into account when determining the appropriate sale price.

    Marketing your flood zone property

    When it comes to selling, smart marketing will make a huge difference in your bottom line in terms of the offers and final sale price. Here are a few ways to ensure you’re marketing your property effectively:

    Work with a real estate agent who has experience selling houses in a flood zone. This is the best way to make sure you are marketing your house effectively. They will ensure you are following all legal disclosure requirements and can help you tailor your marketing to the local housing market. They can also help you locate and connect with investors and other buyers who are specifically interested in buying houses in a flood zone.

    Hire a professional real estate photographer. It will make a huge difference in how your home is perceived once it’s on the market.

    Highlight the strengths of the property and showcase flood mitigation efforts that have already been completed. When it comes to featuring the best things about your house, location, or property, you know best. Make sure that you are communicating those positive attributes in your listing details. Call out any work you have done to mitigate flood risk. This could be things such as elevating your house or installing better drainage systems. You want your buyers to see the potential of the property and feel confident that they can live there safely.

    Be transparent and honest about the flood risk. It’s imperative that you are honest about the flood risk on your property. 

    Successfully navigating the sale process when selling a house in a flood zone

    Once you have a potential buyer, it’s time to start negotiating the sale price. In some markets, you may not need to negotiate. Regardless, you should be prepared to negotiate and offer potential concessions based on the current FEMA designation. 

    Step 1: Help educate the buyer and provide detailed information about the flood risk

    The first step is providing comprehensive, detailed information about the risk will show potential buyers that you are trustworthy and well-informed. Examples of this information include documentation such as:

    • Elevation Certificate 

    • History of flooding in the area

    • Current flood insurance and claims history

    • Flood insurance quotes to help potential buyers understand their future costs

    • Flood maps

    • Results of professional flood assessment 

    Step 2: Negotiation strategies and possible concessions

    To strengthen your negotiation position, it’s not uncommon for sellers to provide a home warranty covering major systems and components for one to two years, which alleviates buyer concerns about potential unexpected repairs.

    As an additional incentive, you might negotiate to offset the buyer’s first-year flood insurance premiums through a direct credit at closing or by adjusting the overall purchase price, thereby mitigating the ongoing financial burden associated with properties in high-risk flood areas. This approach demonstrates your commitment to the transaction and provides tangible financial relief that can make the property more attractive to potential buyers.

    Step 3: If applicable, transition your insurance policy appropriately after the sale

    When selling a home in a flood zone, transferring an existing National Flood Insurance Program (NFIP) policy can be a significant advantage for both the seller and potential buyer. The existing policy, particularly if it has been maintained with a good claims history and potentially grandfathered rates, can represent substantial value, as it may offer more favorable premiums than a new policy purchased at current market rates. 

    Work closely with your insurance agent to understand the specific transferability of the policy, as some NFIP policies can be assumed by the new homeowner, potentially saving the buyer thousands of dollars in insurance costs and providing a unique selling point that can make the property more attractive in a competitive real estate market. Moreover, a transferable policy with a proven history of coverage demonstrates the property’s insurability and the seller’s proactive approach to managing flood risk, which can help alleviate buyer concerns and potentially smooth the path to a successful sale.

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    Rebecca Green

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  • The Shutdown Is Testing California’s Housing Market—and Its Luck

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    The federal shutdown is rattling housing markets in states like Florida, but California’s has barely flinched.

    “Overall, the California housing market hasn’t shown signs of any major shifts since the government shutdown kicked off,” says Realtor.com® senior economic research analyst Hannah Jones. “New listing activity is up year over year, time on market is stable, and inventory growth is decelerating, holding with recent trends.”

    It’s a striking finding given how exposed California could be. The state ranks sixth nationwide for both FHA and VA loan volume, ninth for total USDA housing investments, and sixth for the number of active National Flood Insurance Program (NFIP) policies—all federal programs now halted or critically delayed as the shutdown enters its third week.

    It’s also significant because of California’s sheer scale: Real estate makes up 17.6% of California’s economy, contributing roughly $680 billion to the state’s GDP and supporting hundreds of thousands of jobs across construction, real estate, and home services, according to the National Association of Realtors®.

    But resilience has its limits, and the longer the shutdown lingers, the more pressure builds.

    “Each day the shutdown continues compounds these challenges,” writes NAR Executive Vice President and Chief Advocacy Officer Shannon McGhan. 

    “For millions of Americans, it means uncertainty about closing dates, delayed access to affordable housing, and higher costs as markets react to instability,” she adds. “For the broader economy, it risks slowing growth in one of the country’s most important sectors.”

    California’s calm

    So far, the data signals stability for the Golden State.

    New listings are up compared with a year ago, time on market is largely unchanged, and inventory growth continues to slow in line with national trends. That steadiness reflects who’s driving California’s market—and how they buy. 

    Most borrowers in the state rely on conforming loans, which haven’t been disrupted by the federal shutdown, while cash and jumbo buyers remain active in expensive metros like Los Angeles, San Francisco, and San Jose.

    “Buyer demand remains intact in California, as high-income, cash and jumbo buyers, who tend to be common in high-priced California metros, aren’t directly affected by furloughs,” explains Jones.

    That activity highlights a key portion of the federal government that still is working, despite the shutdown: the IRS’ Income Verification Express Service (IVES), which allows lenders to verify borrowers’ tax information and keep mortgage approvals moving.

    Curtis Knuth, CEO of credit reporting and verification firm Service 1st, says that his company has seen no disruption in delivery of the thousands of tax transcripts it requests from the IRS each week as part of the mortgage vetting process.

    “For the divisions that we work with, there’s no impact,” he tells Realtor.com. “Normal turn times are standing.”

    Knuth explains that the IVES is self-funded by user fees, and thus does not require a new spending bill from Congress to continue normal operations.

    Lisa Binkley, the COO of Service 1st, says that about 97% of tax transcript requests through IVES are currently getting processed within three days, on par with turnaround times before the shutdown.

    For homebuyers, it’s a spot of bright news as the government shutdown drags on with no end in sight.

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    Early signs of strain among government-backed loans

    But beneath that surface of calm, early fractures are forming.

    “I’ve seen a small cooling over the past couple of weeks in buyer enthusiasm, particularly for first-time buyers using FHA or USDA financing,” says Bastien Wissmann, a New Properties & Investment Specialist. 

    While these sales make up a small portion of California’s real estate, the scale or importance of these programs shouldn’t be underestimated. In June 2025 alone, California buyers took out $1.9 billion in FHA loans—the third-highest volume in the nation, according to HUD’s Single-Family Portfolio Snapshot.

    While fewer than 1% of California homebuyers rely on USDA loans, those who do often have few alternatives. And since 2024, the state has received nearly $20 billion in USDA funding for single- and multifamily housing, ranking ninth nationally for total investment.

    Unlike conforming loans, these programs rely on federal staffing and approvals, both of which are now frozen. “The lack of clarity about government operations breeds caution, even among qualified buyers who would otherwise be eager to move ahead,” Wissmann says.

    Sellers, meanwhile, are adjusting rather than retreating. “Most are willing to extend the closing process a little longer or notch prices down slightly to keep deals chugging along, an acknowledgment of caution and optimism,” Wissmann adds.

    Shutdown delays hit builders first

    But while the shutdown’s effects have been mostly muted for the market at large, builders are starting to feel the drag.

    “Builders and developers are beginning to complain about the slower processing of permits and inspections,” says Wissmann. “These small delays can cause ripples throughout projects, especially for multiunit residential developments.”

    While many permits are issued from local authorities, sometimes those authorities need federal coordination to move the process forward.

    “Right now, the impact has been minimal, but the longer the shutdown goes, the more those reviews and permitting procedures are going to start clogging up,” Russel Riggs, senior regulatory representative for NAR, told Realtor.com last week. “After four weeks, you’ll really start seeing the impacts very clearly.”

    As we near the four-week mark in the shutdown, Gary Mkrtichyan, a developer and general contractor with Opus Builders in Los Angeles, says he’s run into significant delays since the start of October.

    He’s currently overseeing several new-home projects in Hollywood that require city-managed infrastructure, everything from sewer connections to fire hydrant relocations. But recently, even routine requests have gone unanswered.

    “I’ve never seen this type of slow movement,” he says.

    For developers, those delays can come with costly consequences.

    “I’ve paid close to $20,000 that went to waste because they can’t move efficiently and give us what we need to get our projects going,” Mkrtichyan says.

    A hidden flood risk

    It’s been widely reported that the lapse of the National Flood Insurance Program has put 4.7 million policies at risk at the height of hurricane season. But in California, there’s an added danger.

    In wildfire-scarred regions, burned hillsides become more vulnerable to floods—without vegetation, the ground can’t absorb rainfall, heightening the risk of flooding even for properties that are outside of designated Special Flood Hazard Areas.

    FEMA estimates that flood risk remains significantly higher for at least five years after a major wildfire. Yet only about 4% of homes in wildfire-affected states carry federal flood insurance, leaving most owners—and many new buyers—exposed as federal coverage stalls.

    Less than a year after the devastating Palisades and Eaton fires, that’s an especially serious problem for Californians still rebuilding. With the NFIP stalled amid the federal shutdown, no new or renewed policies can be issued. 

    For buyers in high-risk areas, that bureaucratic pause can bring home closings to a sudden halt.

    “If the shutdown lingers, home sales could see delays related to insurance. For homes needing a new/renewed flood insurance policy, the suspension of the NFIP puts closings at risk and slows down transaction activity,” explains Jones.

    The lag effect: When stability turns

    For now, California’s housing data looks calm, but in a market this interconnected, the effects of a freeze as extended or expansive as this one are unlikely to stay invisible for long. The real risks come later, as the slowdown ripples through listings, loans, and sentiment.

    “If homes sit for longer due to issues with mortgage loan approval or insurance challenges, delistings or price reductions may increase,” says Jones. “This is especially relevant if consumer sentiment shifts or anxiety over the shutdown increases, which could convince some buyers to hold off.”

    The real estate industry makes up roughly 18% of California’s $4.1 trillion economy—nearly one-sixth of the entire U.S. GDP. Each median-priced home sale generates about $230,000 in local economic activity and supports three jobs, from contractors and appraisers to movers and furniture retailers, according to research from NAR.

    California’s stability may be masking a lag effect—a market that looks steady on the surface but could start showing cracks in the coming weeks. If that happens, the state’s housing slowdown won’t stay local for long.

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    Allaire Conte

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  • Government shutdown enters fourth week, affecting federal workers, services, economy

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    The government shutdown is entering a fourth week as Democrats and Republicans blame each other for holding the country “hostage.” Caught in the middle, federal workers, government services, and the economy are all feeling the impact. Previous shutdowns have seen reduced overall economic growth, disproportionately affecting certain industries. National parks and museums remain closed, flight delays are mounting, and backlogs for new small business loans and flood insurance renewals are growing.Republicans continue to accuse Democrats of blocking paychecks by refusing to reopen the government, while Democrats argue that Republicans are unwilling to negotiate over the core issue of health care funding. “Congressional Democrats seem to want to keep the government shut down even though it would mean that a lot of you would not get your paycheck,” Vice President JD Vance said in remarks to an audience of Marines celebrating the 250th anniversary Saturday.Democrats pushed back in “No Kings” protests across the country.”They’re the ones acting like children refusing to negotiate with Democrats in the Senate who they know have to vote for a budget in order for it to become law,” Sen. Chris Murphy said in an interview Saturday.The shutdown has had a sizable impact as uncertainty weighs on the federal workforce. Under the Trump administration’s direction, federal agencies have been planning not just furloughs but also permanent layoffs. However, a federal judge has temporarily blocked the firings, deeming them potentially illegal.Public perception of who is to blame has been roughly evenly split. A new Associated Press poll finds that a majority, about 6 in 10 Americans, blame President Donald Trump and Republicans for the shutdown. An even larger majority, three-quarters of Americans, believe both sides deserve at least a “moderate” share of the blame, suggesting that no one has truly escaped responsibility for the shutdown.Watch the latest coverage on the federal government shutdown:

    WASHINGTON —

    The government shutdown is entering a fourth week as Democrats and Republicans blame each other for holding the country “hostage.” Caught in the middle, federal workers, government services, and the economy are all feeling the impact.

    Previous shutdowns have seen reduced overall economic growth, disproportionately affecting certain industries.

    National parks and museums remain closed, flight delays are mounting, and backlogs for new small business loans and flood insurance renewals are growing.

    Republicans continue to accuse Democrats of blocking paychecks by refusing to reopen the government, while Democrats argue that Republicans are unwilling to negotiate over the core issue of health care funding.

    “Congressional Democrats seem to want to keep the government shut down even though it would mean that a lot of you would not get your paycheck,” Vice President JD Vance said in remarks to an audience of Marines celebrating the 250th anniversary Saturday.

    Democrats pushed back in “No Kings” protests across the country.

    “They’re the ones acting like children refusing to negotiate with Democrats in the Senate who they know have to vote for a budget in order for it to become law,” Sen. Chris Murphy said in an interview Saturday.

    The shutdown has had a sizable impact as uncertainty weighs on the federal workforce. Under the Trump administration’s direction, federal agencies have been planning not just furloughs but also permanent layoffs. However, a federal judge has temporarily blocked the firings, deeming them potentially illegal.

    Public perception of who is to blame has been roughly evenly split. A new Associated Press poll finds that a majority, about 6 in 10 Americans, blame President Donald Trump and Republicans for the shutdown. An even larger majority, three-quarters of Americans, believe both sides deserve at least a “moderate” share of the blame, suggesting that no one has truly escaped responsibility for the shutdown.

    Watch the latest coverage on the federal government shutdown:

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  • Home sales and the government shutdown: What buyers and sellers need to know – WTOP News

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    As the federal government shutdown drags on, Maryland Realtors warns of growing uncertainty in the housing market. From delays in flood insurance to paused USDA loans, buyers and sellers alike could face challenges.

    The longer the government shutdown continues, the more uncertainty could be injected into the process of buying or selling a home.

    That’s according to Denise Lewis, president of Maryland Realtors, a nonprofit association representing more than 25,000 realtors statewide.

    “I think this is going to affect buyers and sellers equally,” Lewis told WTOP.

    Despite concerns about what could happen if the shutdown drags on for a month or longer, Lewis said, “Nothing is coming to a screeching halt.”

    The first place that buyers and sellers may feel the impact of the federal shutdown is in the process of getting flood insurance, Lewis said.

    “The National Flood Insurance Program can’t issue new or renewal policies during the shutdown,” Lewis said.

    However, Lewis said, there’s no need to panic. Realtors are learning about possible workarounds.

    “We’re contacting insurance companies and finding out how to get the private insurance,” Lewis said.

    There’s another possibility: “Existing policies that are backed by the National Flood Insurance Program can be transferred to the buyer,” she said, but there are some exceptions.

    “We’re finding out that it can’t be transferred if it’s in that renewal — like that 30-day, 60-day renewal period,” she said.

    Some federal loan programs are affected, including USDA loans, which, Lewis said, “are largely paused.”

    “You can certainly identify that that’s the program you want to use, and probably get your loan officer to give you numbers on what that looks like, but they’re not generating any new USDA loans — or closing them right now — until the shutdown ends,” Lewis said.

    The Department of Veterans Affairs will continue to guarantee home loans during the shutdown, but according to Maryland Realtors, staffing reductions could delay the processing of those loans. That includes appraisals, approvals and issuing certificates of eligibility.

    According to Maryland Realtors, if the shutdown lasts for a month, there could be a backlog in loan approvals and the issuance of flood insurance, for example.

    If the shutdown continues beyond one month, the National Flood Insurance Program funding could run out, and that could delay claim payments. And local governments could see a drop in revenues from transfer taxes and recordation fees. According to Lewis, rural and coastal communities could see the greatest impact.

    Lewis said the most important thing to do for anyone contemplating — or in the process of selling or buying a home — is to get informed.

    “Talk to your realtor. … And find out if there’s anything coming down the pike that could affect you,” she said.

    Get breaking news and daily headlines delivered to your email inbox by signing up here.

    © 2025 WTOP. All Rights Reserved. This website is not intended for users located within the European Economic Area.

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    Kate Ryan

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  • This Florida woman’s nearly $100K flood insurance claim was denied after Tropical Storm Debby due to a major loophole

    This Florida woman’s nearly $100K flood insurance claim was denied after Tropical Storm Debby due to a major loophole

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    This Florida woman’s nearly $100K flood insurance claim was denied after Tropical Storm Debby due to a major loophole

    When Tropical Storm Debby came through Pinellas County, Florida in early August, Danielle Jensen thought her home was protected with flood insurance from the National Flood Insurance Program (NFIP). After all, she did spend $8,600 on a policy administered directly by the Federal Emergency Management Agency (FEMA).

    But when insurance adjusters came through, they denied her claim outright, not due to any fault of her own. A “prior loss” report discovered that the previous owner filed a flood insurance claim, but did not complete the repairs with the claim payout. From the home’s condition to the serial numbers on the appliances, everything was the same from the previous insurance claim, leaving her family on the hook for close to $100,000 in damages.

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    “It’s worthless, unless we flood again after we’ve made all these repairs,” Jensen told Tampa Bay’s News Channel 8. “At which point we could use it because it’s all new materials.”

    A denial like this can happen to anyone living in one of the roughly 23,000 NFIP communities if homeowners aren’t aware of their property’s past.

    How the National Flood Insurance Program works

    The National Flood Insurance Program is offered to homeowners through more than 50 insurance companies and directly through FEMA with NFIP Direct. According to FEMA, anyone living in a “high-risk flood area” with a mortgage from a government-backed lender has to have flood insurance.

    The policy can cover both the home and the homeowner’s belongings. Building coverage includes things like the foundation and electrical and plumbing systems, while contents coverage can help homeowners recover personal items like clothes, electronics and furniture. Based on government data, more than $79 billion has been paid for nearly 1.9 million filed claims throughout the life of the program.

    Unfortunately, traditional homeowners and renter’s insurance will not cover flood damage, and if your home has received federal disaster assistance in the past, you are required to hold flood insurance for as long as you live at the property. That doesn’t guarantee that every situation will be covered — and in the case of Jensen, the actions of the past homeowner caused her flood claim to be denied.

    Under the current NFIP Claims Manual, a claim can be denied if there was a previous flood damage claim and no repairs were made with the policy’s payout.

    But as of October 1, 2024 sellers will be legally required to disclose any prior flood claims and payouts to homebuyers so they can avoid this trap.

    Read more: These 5 magic money moves will boost you up America’s net worth ladder in 2024 — and you can complete each step within minutes. Here’s how

    What can I do to protect my home from denied flood insurance claims?

    The problem for NFIP-participating communities up until now is that federal law hasn’t required disclosure of a previous flood insurance claim, or the outcomes thereof. Any disclosure of claims information without the consent of the claimant or current homeowner has been seen as a violation of the Privacy Act — meaning the owner hasn’t had to provide information about prior claims during the home sales process.

    Until Florida’s House Bill 1049 goes into effect, it’s a good idea to get a clear yes or no regarding past claims from the seller on the disclosure form before purchasing a home in a high-risk flood zone. Any knowledge gaps or unsure responses may be a red flag. You can also work with your real estate agent to get as much information as you can before closing, including requesting a full prior loss report from the seller.

    Congressional representatives in the state Kathy Castor and Gus Bilirakis also told News Channel 8’s Better Call Behnken that they’re working on larger solutions to protect flood victims and urge those who have had their claims denied to reach out for support. They plan to increase provider competition to reduce flood insurance rates and mandate more transparency to prevent what happened to Jensen from happening again.

    What to read next

    This article provides information only and should not be construed as advice. It is provided without warranty of any kind.

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  • 1 in 4 U.S. homeowners is financially unprepared for costs of extreme weather, report finds

    1 in 4 U.S. homeowners is financially unprepared for costs of extreme weather, report finds

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    Add tornadoes, wildfires and floods to the already lengthy list worries for U.S. homeowners.

    More than a quarter of homeowners (26%) say they are not financially prepared to handle the costs if extreme weather damages their home, according to a new report from Bankrate. Among those polled, 14% reported they are somewhat unprepared and 12% say they are very unprepared, the personal finance site found. The findings come as hurricane season reaches its peak.

    People who are “unprepared for that kind of climate risk intersecting with the amount of unknown risk that exists in the country is really alarming in a lot of ways,” Dr. Jeremy Porter, head of climate implications research at First Street, a firm that studies climate risk, told CBS MoneyWatch.

    The Bankrate survey provides a snapshot of homeowners’ financial position in a climate landscape where summers are becoming hotter, hurricane season more active and wildfires more destructive. As billion-dollar climate disasters become more common, homeowners will have to absorb part of the cost via higher insurance rates, weather-proofing strategies and repairs.

    In the Bankrate survey, 15% of homeowners said they would not be able to pay their insurance deductible without going into debt if their home was damaged in an extreme weather event.

    Geographically, people in the the South (29%) and West (28%) reported the greatest degree of financial vulnerability to extreme weather, the survey found. 

    “People living in the South are more likely to have home policies, so they’re going to have to pay the biggest amount, and their earning potential is actually lower,” said Shannon Martin, an analyst at Bankrate.

    Changing insurance market

    It’s no secret that the insurance market is going through a rapid transformation. Insurers like Allstate and State Farm are withdrawing from states prone to fires and coastal flooding or opting to raise their premiums, making homeowners’ coverage less affordable. 

    Porter said rates are likely to rise in the future given that insurers hasn’t fully priced climate-related costs into the real estate market. “There are more increases to come in terms of additional costs of even homeownership,” he said.


    Understanding your homeowner’s insurance

    02:25

    According to Bankrate, 7% of those polled said they do not have homeowners insurance. That figures rises to 15% for people earning less than $50,000 annually. According to the Insurance Information Institute, 12% of homeowners went without insurance in 2022.

    How to protect your property

    Understanding your risk is important, experts say, especially given that dealing with extreme weather is unprecedented territory for most Americans. 

    “Homeowners may also face the risk of hazards they have not faced in the past,” said Andrew Kruczkiewicz, a senior staff associate at the National Center for Disaster Preparedness, part of Columbia University’s Climate School. 

    Of those polled by Bankrate, 43% said they had not taken any steps in the past five years to protect their home against property damage due to dangerous weather, while just 9% of homeowners had invested in weather-proofing measures.

    By contrast, more homeowners are at least aware of the growing risks, Martin said. “What this survey told me is that more people are kind of paying attention to what’s happening in terms of extreme weather.”

    According to Bankrate, 39% of homeowners said that they reviewed their auto or home insurance policy to ensure they have the proper level of coverage. 

    “It seems like such a simple and basic thing, but it’s honestly the first step that everyone should take,” Martin said.


    Can 3D-printed homes withstand a changing climate?

    02:04

    Martin recommends calling your insurer or finding a time to meet with them in person to review your policy. Something like fire or flooding may be covered one year and not the next, she said.

    Martin also said people should check out Risk Factor from First Street and Climate Check, tools that allow users to look up their property and view extreme weather risk. “

    You can look there and understand the smaller, more affordable things you can do to your house to make sure that you’re protecting yourself against those types of damages,” Porter aid.

    Getting out while there’s still time

    In some cases, mitigation strategies simply won’t cut it. Over those polled in Bankrate’s survey, 7% said they ultimately moved to a lower risk area to reduce the risks of extreme weather.

    The trend is relatively small at this point, said Porter. “I would expect in the near future, we won’t see any mass macro level migration.” Still, more and more people are taking risks into consideration and making climate informed decisions, he added.

    Joe Printz, a New York-based wine shop owner and former restaurateur, is one of them. Printz closed on a home in Napeague Harbor, on the South Fork of Long Island, New York, in early 2021. Just three years later, he and his partner are already considering selling it for fear it might one day be underwater.

    Made of six repurposed steel shipping containers fit together Tetris style, Printz ‘s home, nicknamed the “Beach Box,” is a formidable force against extreme weather. “I’m telling you, a tidal wave would probably only knock out the windows,” he said. 

    But even the sturdiest of materials may not stop it from getting pummeled by a flood. If past storms are any indication, water from the ocean, only two and a half blocks away in the case of Print’s property, will find its way.

    A local coastal resiliency report predicts there’s a 60% chance a 100-year coastal flood will hit that part of Long Island in the next 30 years and that sea level rise could transform East Hampton into a series of islands as early as 2070.

    Printz doesn’t want to take any chances. “We are going to fix up our house. We’re going to live in it for three or four more years and probably sell it,” he said.

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  • The residents in Waterville are still cleaning up after the devastating flooding

    The residents in Waterville are still cleaning up after the devastating flooding

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    Some homeowners are finally seeing the damage for the first time since the historic flooding


    Some homeowners are finally seeing the damage for the first time since the historic flooding

    02:08

    WATERVILLE, Minn. — Flood victims hauled another 100+ loads of debris to Waterville’s community flood cleanup as homeowners got deeper inside their flood-ravaged homes.

    “This is the first time we were able to haul anything physically and get rid of it,” Pete Shutrop told WCCO News on Saturday. “It’s a lot of work and it’s sad.”

    Officials in Waterville say they are still in emergency mode, as the small town grapples with historic flooding.

    “The worst thing was the smell,” Renee Shutrop added. “You don’t even realize the amount of mold and mildew that has grown in a matter of weeks. It’s up the sides of the wall, it’s on the furniture.”

    According to data from the Federal Emergency Management Agency, most homeowners in Waterville don’t have federal flood insurance and there’s just 33 active policies in town. Local officials hope the disaster declarations will help the 95% of people who are uninsured.

    The American Red Cross on Saturday held another disaster resource expo at The Villages, a non-profit events space in Waterville. The Red Cross, working in tandem with other organizations, provided meals and cleaning supplies.

    They’re also offering help with something intangible: emotional support.

    “We’ve been passing out hugs anytime someone needs a hug or a shoulder to cry on,” Villages owner MaryAnn Eich said. “They need a hug and a smile and a little bit of encouragement right now.” 

    For the latest flooding updates and resources, click here.

    Jonah Kaplan


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    Jonah Kaplan is WCCO and CBS News Minnesota’s investigative reporter and has built a strong reputation for his balanced and in-depth coverage of high-impact issues including the economy, immigration, education, public safety, and the military, among others.

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  • Floods are raging in Minnesota. But few have flood insurance, state commerce agency says.

    Floods are raging in Minnesota. But few have flood insurance, state commerce agency says.

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    MINNEAPOLIS — Just one inch of floodwater can cost homeowners $25,000 in damage, according to FEMA. But as parts of Minnesota are underwater, most don’t have the insurance to cover the high costs of the high water. 

    Of the 2 million households in the state, just over 6,700 have policies through the National Flood Insurance Program managed by FEMA — the main provider of flood insurance in the U.S. — a spokesperson for the Minnesota Department of Commerce said. That represents a 35% decrease in policyholders from three years ago. 

    An additional 800 have insurance through private plans. 

    Aaron Cocking, president and CEO of the Insurance Federation of Minnesota, said people are often shocked to learn their homeowners’ insurance doesn’t cover flooding. 

    “As we look across the devastation that we’re seeing in the state right now, this is a wake-up call for all of us,” he said. 

    Last year, the commerce department in a news release said Minnesota ranked last in the country for flood insurance adoption with less than 1% of homes having coverage; Louisiana ranked first at 25%.

    But floods can have wide-ranging impacts on communities. On average, the agency says, 40% of claims to the National Flood Insurance Program happen outside of high-risk areas. Three years ago, the average flood insurance claim payment was more than $44,000 while the premium was $912. 

    Cocking notes that while the premium may seem high on top of other costly insurance bills, it is a worthwhile investment in the long run. State experts say Minnesota has experienced more damaging rains due to climate change. 

    With NFIP plans, homeowners can choose the scope of their coverage, but it maxes out at $250,000 for the structural damage and $100,000 for personal belongings. Policies are not effective until 30 days from purchase, with some exceptions. 

    To see a list of providers in Minnesota, click here. 

    Caroline Cummings


    WEB-Caroline-Cummings.jpg

    Caroline Cummings is an Emmy-winning reporter with a passion for covering politics, public policy and government. She is thrilled to join the WCCO team.

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  • Homes in parts of the U.S. are

    Homes in parts of the U.S. are

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    Millions of American homeowners like Mary Morse find themselves stuck in a financial bind, facing mounting risks from wildfires and floods linked to climate change while their home insurance rates rocket upwards. Increasingly, the crowning blow comes when insurers withdraw coverage, leaving individuals and even entire communities vulnerable.

    “I got a letter from my insurance company that said, ‘We’re not going to serve your area anymore’,” Morse, 75, told CBS News about her Pine Cove, California, home. “I even sent [the insurance agent] a picture of my fire hydrant. It didn’t help.”

    The growing risk of wildfire means that some parts of California are becoming “essentially ‘uninsurable’,” according to a new analysis from the First Street Foundation, a non-profit that studies climate risks, shared first with CBS News. The research has alarming implications for homeowners across the U.S., with even residents of inland states such as Kentucky, South Dakota and West Virginia facing sharply higher insurance costs because of increased damage from extreme weather that experts attribute in part to climate change.

    About 35.6 million properties — one-quarter of all U.S. real estate — face increasing insurance prices and reduced coverage due to high climate risks, the analysis found. The rise in insurance costs isn’t merely a hit to homeowners’ budgets, however — the higher costs also devalue their properties, First Street said. 

    “Absolutely crippling”

    “You’re talking about getting a letter in the mail that says somewhere between 60%, and as high as mid-80%, increases for policies,” First Street CEO Matthew Eby said. “That is crippling. Absolutely crippling. And so those homes are not, from an investment scenario, something that you would invest in.”

    Morse said she put her house on the market for a year, but it didn’t sell — a failure she ascribes to the recent rise in mortgage rates as well as her insurer withdrawing from her region. 

    “The interest rates went up at the same time as the fire insurance went away. And I think a combination of that made it really difficult for people to purchase houses,” she said. 

    Pine Cove, located in Riverside County, California, just over 100 miles southeast of Los Angeles, ranks as one of the 10 worst zip codes for insurance non-renewals in the U.S, according to First Street. The firm also found that Riverside County is most at risk to losing homes and other properties due to wildfires each year.

    Insurers of last resort

    Morse ended up getting insurance through her state’s “insurer of last resort,” the California FAIR plan. But at a cost of almost $2,000 a year she’s paying twice as much for coverage that isn’t as extensive as her previous policy, and she said she’s worried the rate is likely going to keep going up. 

    “I’m 75 years old and I’m still working so that I can afford my mortgage,” she said. “If this continues to increase the way it’s been increasing, I’m going to have a problem.”

    Several major insurers have stopped renewing policies in climate-hit states, with Allstate and State Farm recently announcing they were dropping some coverage in California and AAA opting not to renew some policies in Florida. 

    When that happens, state-run “insurers of last resort” programs provide some coverage for homeowners, although First Street noted that the premium is often “multiple times” the cost of their lost policy and provides less coverage. 

    For its part, the insurance industry says that the frequency and severity of claims are on the rise, making insurers more cautious in deciding where to offer coverage. “[T]his increasing cost of claims will be passed on to consumers in the form of higher insurance premiums,” the National Association of Insurance Commissioners told CBS News in response to First Street’s findings. 

    Despite such challenges, millions of Americans continue to move to regions prone to extreme weather and natural disasters. 

    “Humans are not that rational. So there’s a lot of people that just want to live in Florida because it’s beautiful and it’s by the ocean and it has the sunshine,” Eby said. “And so, as long as that’s happening, then this risk bubble, the insurance bubble that we see, is going to continue to grow.”

    How big a hit?

    An insurance company deciding not to renew coverage against risks like fires and flooding can instantly devalue a property. 

    First Street found that a Florida homeowner who is dropped by an insurer could see the property’s value decline 19% to 40%. That’s because the homeowner would need to obtain coverage from the state’s insurer of last resort, Citizens Insurance Agency. Citizens’ higher insurance rates would lower the value of the home, First Street noted. 

    Some homeowners in regions with a higher risk of climate disasters are taking things a step farther by foregoing disaster insurance altogether. 

    Flash Flooding Hits Southern California
    Mud surrounds a home damaged in a flash flood caused by a monsoonal thunderstorm that dumped rain on a region still recovering from Tropical Storm Hilary on September 2, 2023 in Thermal, California.

    David McNew / Getty Images


    Take Jack Anderson of Key West, Florida. Anderson told CBS News he dropped windstorm and flood coverage when prices got “crazy.” He estimated that his home would require $7,000 a year to insure through Citizens. As a result, he and his wife decided to drop the disaster coverage, although he noted they have homeowners insurance, “just so nobody thinks we’re truly insane.”

    Anderson said his 115-year-old home has been through a lot of storms. 

    “Like the investors say, past performance is no guarantee of future returns,” he told CBS News. But, he added, “We don’t know what’s going to happen here as these storms get worse and worse, but it just feels like it makes more sense for us” to set the money aside themselves in case they need to make repairs from a storm.

    Living in an insurance bubble

    The insurance industry is raising rates, demanding higher deductibles or even withdrawing coverage in regions hard-hit by climate change, such as Florida and Louisiana, which are prone to flooding, and California because of its wildfire risk. 

    But other regions across the U.S. may now also exist in an “insurance bubble,” meaning that homes may be overvalued as insurance is underpricing the climate change-related risk in those regions, First Street said. 

    Already, 6.8 million properties have been hit by higher insurance rates, canceled policies and lower valuations due to the higher cost of ownership, and an additional 35.6 million homeowners could experience similar issues in the coming years, First Street noted.

    “At the end of the day, we’ve been building in the wrong areas, with the wrong building codes, and we’ve been suppressing rates and telling people it’s OK for decades,” Eby said. “And all of that is coming to a head right now because insurance is at the very tipping point of the cost of all of those decisions we’ve made in the past.”

    —With reporting by CBS News’ Ben Tracy

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  • Storms are wreaking havoc on homes. Here’s how to make sure your insurance is enough.

    Storms are wreaking havoc on homes. Here’s how to make sure your insurance is enough.

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    Days after Tropical Storm Hilary battered the West Coast with record rainfall, flash floods and fierce winds, Californians now face another challenge: Figuring out the costs of repairing their battered homes and replacing valuables.

    Climate change has put more Americans in the locus of storms and other extreme weather events that could have devastating consequences on their household finances. In the past year alone, more than 15 natural disasters have hit the U.S., with catastrophes like the Maui wildfires destroying billions of dollars worth of property, according to data from the National Centers for Environmental Information.

    As natural disasters become more frequent and severe, having enough insurance coverage is essential. However, not all insurance policies cover every type of extreme weather event.

    Here’s how to make sure you have the right type of insurance for your home, and how to get additional coverage if you need it.

    Know your plan 

    Standard homeowner policies differ from company to company. Some plans may not cover losses from earthquakes, certain types of water damage, and wind damage caused by tornadoes or hurricanes, according to insurance company Allstate. 

    To know what your plan covers and how much, check your policy. You can request a digital or hard copy of your homeowners insurance policy directly from your insurance company. In addition, many insurers offer mobile apps that let you view and manage your policy information. 


    Home insurance rates rising nationally

    03:03

    Coverage add-ons

    Insurance policy add-ons, also known as endorsements or riders, allow you to personalize your insurance policy to meet your specific coverage needs, according to personal-finance website Bankrate.

    You can purchase different types of endorsements to alter or extend existing coverage to protect high-value items in your home that are not insured by a basic policy. This helps ensure that any valuable items destroyed in a natural disaster will be replaced by your insurance at their current market value.

    A scheduled personal property endorsement, which extends coverage beyond your basic policy, is one way to insure valuable items such as jewelry. To get this type of endorsement, your insurance company will likely require an appraisal or proof of value for the items you want covered. 

    Alternatively, you can also insure high-end possessions by purchasing additional blanket coverage which is used to increase coverage limits for an entire class of items. For example, if your standard policy covers up to $2,000 worth of artwork, blanket coverage could increase that coverage limit to $10,000. This option doesn’t require an appraisal. 

    Get flood insurance 

    Floods are the most common weather-related natural disasters, and they occur in all 50 U.S. states, according to the National Severe Storms Laboratory. Just one inch of flooding can cause nearly $27,000 worth of damage to a one-story, 2,500 square-foot home, data from the Federal Emergency Management Agency shows. 

    Flood insurance protects your home and other property against flood-related damages. As most home insurance companies don’t offer this type of coverage as an add-on, you’ll most likely have to purchase a standalone flood insurance policy. 

    The National Flood Insurance Program offers policies that you can purchase through an insurance carrier or private insurance company. 

    Keep an up-to-date inventory list 

    Having a list of everything you own can take some of the pain out of filing an insurance claim and help you get the most out of your policy.

    Make an inventory list that includes all of the major items in your home with their dates of purchase and how much you paid for them. Then, snap photos of all the items on your list. If you have receipts for your items, store them alongside your inventory list. These documents can help you get more money from your insurance company to replace your damaged possessions after a weather-related disaster. 

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  • Ten states sue to try to block large flood insurance rate hikes

    Ten states sue to try to block large flood insurance rate hikes

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    Louisiana and nine other states filed a lawsuit against the federal government Thursday to block sharp increases in national flood insurance rates that are slated to be phased in over the coming years, saying the steeper price could cost some people their homes and businesses.

    Dozens of local Louisiana governments and flood control districts also are plaintiffs in the lawsuit, which was filed in U.S. District Court in New Orleans. The Department of Homeland Security and the Federal Emergency Management Agency are among the defendants.

    Louisiana Attorney General Jeff Landry joined several local officials and business leaders at a news conference announcing the suit on Thursday.

    FEMA has said its new premium system is an improvement over past methods, incorporating data that wasn’t used in the past, including scientific models and costs involved in rebuilding a home. The agency has said the old method could result in people with lower-valued homes paying more than a fair share while those with higher-value homes pay relatively less.

    However, Louisiana officials have been complaining for months about the coming rate hikes, saying they could impose impossible financial burdens on some in the state.

    Increases are capped at 18% annually. But when they are fully implemented, some residents will be paying significantly more.

    An April analysis of Louisiana rates by The Times-Picayune/The New Orleans Advocate put the average increase in the state at 134%. But officials have been pointing to various individuals facing eventual tenfold increases in their annual premiums, including some whose homes have never flooded.

    In a lawsuit filed in April seeking access to information and data used to calculate rates, St. Charles Parish officials said the average cost of flood insurance policies there will increase from $815 to $2,766 annually.

    At Thursday’s news conference, state and local officials renewed complaints that federal officials have refused to divulge methodology and data used in computing the new rates. And, they said, the new premium rates fail to take into account individual homeowners’ flood mitigation efforts, such as house raising, or local governments’ construction of levees and other flood protection measures.

    Landry said, “We want reasonable, reliable premiums so that Louisiana can grow and thrive.”

    In a news release, Landry said the new rate formula means “flood insurance policies have become their own natural disaster.”

    He said, “The rising costs are directly attributable to federal government bureaucrats taking something that has worked for decades, shrouding it in mystery, and then making it worse.”

    Landry added that the new rates “will force people to drop their flood insurance coverage or,  worse, surrender their homes to the banks and close their businesses forever.”

    He also said the changes “are completely disrupting the housing market and the economy across our state and our nation.”

    Florida, Idaho, Kentucky, Mississippi, Montana, North Dakota, South Carolina, Texas and Virginia are the other states listed as plaintiffs by Landry’s office. “It’s not just a coastal issue, although it does deeply, deeply impact our coastal communities,” Louisiana Solicitor General Elizabeth Murrill said. “It impacts working communities. It impacts anybody who lives near water.”

    FEMA declined comment in an email, citing a policy of not commenting on pending litigation.

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