If I buy a house in a "flood zone" what does that mean and am I required to buy flood insurance?  Will it be harder to get the house insured?

Several decades ago, the United States Government recognized it was costing the taxpayer a lot of money to come to the aid of people who were in flood zones.  The Federal Government would declare such areas to be a "disaster area" which made it eligible for federal funding.  We are all familiar with what happened in New Orleans.  As a result of that, the Federal Government drew up maps in what they call the "Hundred Year Flood Plain" in which it determined in what places it was likely that the property would flood within a hundred years.  That was based upon certain historical information.

After the United States identified all of these areas, they then passed the law prohibiting lenders from making mortgage loans on properties that were located in flood zones if the owner did not get flood insurance.  In order to be eligible for flood insurance, the community in which the property is located must have adopted certain building code restrictions which would minimize the damage caused by flooding.  Most of us have seen properties along shorelines that are on stilts without a foundation.  That is for the exact purpose of insuring that if there is a flood, it will do a minimum amount of damage.  If the property is located within a flood zone, there are certain other requirements such as you cannot have anything in the basement such as the heating apparatus, hot water heaters, and the like which again would lead to a damage claim.  Conversely, if you are not in a flood zone, you cannot buy flood insurance.  Flood insurance designed for flood-prone areas.  Just because a house is in a flood zone, that should not make it more difficult to buy insurance. There are areas, such as Cape Cod, where property owners that have had difficulties in obtaining insurance  but not because of floods, but because of hurricane damage that the insurers perceive to be a greater risk there than other areas in the country.

If you have questions about this or any other real estate matter, please contact Tom Bennett at (617) 531-6574 or tvb@barronstad.com.