How to Use This Presentation Real estate agents can be valuable allies in communicating flood risk and the importance of having flood insurance to potential clients. Use this presentation to educate real estate agents on flood insurance basics and how flood insurance can impact their clients, particularly as it pertains to the sale or purchase of houses. This presentation is virtually ready to use immediately. Customize or delete information on slides 2, 17, 19, and 24, based on your specific needs. Once you update those slides and delete this instructional slide, you are ready to present. Questions or Comments? Please contact

Flood Insurance and Your Client’s Home [AGENCY NAME] [AGENT NAME] [DATE] [Agency Logo]

 National Flood Insurance Program  Flood Misconceptions and Facts  Flood Insurance Basics  Resources for You Presentation Overview

The National Flood Insurance Program

 Everyone is at risk for flooding  Anywhere it can rain, it can flood  Just a few inches can cause tens of thousands of dollars in damage Why Flood Insurance?

 Provides flood insurance to homeowners, renters, and business owners  Community must participate in the program and enforce sound floodplain management ordinances  Written by insurance agencies through their carrier or direct with the NFIP (rates and coverage are the same for all agents)  Created by Congress in 1968  Administered by the Federal Emergency Management Agency (FEMA) National Flood Insurance Program (NFIP)

What Is a Flood?

A Flood Defined Inundation of two or more acres of normally dry land or of two or more properties (one of which is your property) from:  Overflow of inland or tidal waters;  Unusual, rapid accumulation or runoff of surface waters from any source;  Mudflow; or  Collapse or sinking of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated levels that result in a flood.

Flood Misconceptions and Facts

 Misconception: “I don’t live in a flood zone.”  Fact: Everyone lives in a flood zone.  Floods are the #1 natural disaster in the United States.  If it can rain, it can flood.  Risk does not stop at a line on a flood map. Misconception #1

 Misconception: “I’m already covered—my homeowners policy covers flooding.”  Fact: Most insurance policies do not cover flooding; only flood insurance covers flood damage. Misconception #2

 Misconception: “If a flood happens, disaster assistance will cover me.”  Fact: Disaster assistance facts:  Only available if the President declares a Federal disaster.  You must qualify.  Typically given in the form of a loan that must be repaid, with interest. Misconception #3

Flood Insurance Basics

 Single-peril policy  Pays Replacement Cost on single-family, primary residences if insured to at least 80 percent of its replacement cost  As much as $250,000 in coverage  Pays Actual Cash Value (depreciated cost) on second homes and underinsured homes  Contents coverage is not automatically included in your policy (with the exception of a Preferred Risk Policy)  As much as $100,000 in coverage  Only pays Actual Cash Value Three Basic Facts of a Standard Flood Policy

 Flood Zone  High-risk: Flood insurance required if mortgage is from a federally regulated or insured lender (Zones A & V).  Moderate- to low-risk: Flood insurance is not required. But while the chance of flooding is reduced, it is not eliminated (Zones B, C, & X).  Elevation for high-risk areas  Coverage and deductibles  Date of Construction Key Rating Elements

 Typically, there is a 30-day waiting period for a flood insurance policy to go into effect  Exceptions:  Flood Insurance is required by a federally regulated and insured lender—0 days  Wildfire 30-day waiting period exception—0 days  Initial purchase of flood insurance as the result of a map revision—1 day Waiting Periods

 Policy for homes in moderate- or low-risk areas:  Lower cost policy  Policy includes both building and contents  Contents-only coverage is available for renters Preferred Risk Policy (PRP)

 Restores subsidized rates for buildings constructed before the first Flood Insurance Rate Map became effective (pre-FIRM)  Allows subsidized rates to continue following sale or purchase of pre- FIRM properties  Rates for pre-FIRM non-primary residences will continue increasing 25 percent each year until reaching full-risk rates  Rates for pre-FIRM business buildings will also continue increasing to full-risk rates  Other subsidized rates will increase more gradually over time  Full-risk rates are property-specific and elevation-rated Recent Legislation

 Buyers in high-risk areas  Most lenders require flood insurance  Request the seller’s Elevation Certificate  Get a flood insurance quote well before closing  Sellers in high-risk areas  If receiving a subsidized rate, transfer it to the new owner  Consider mitigation projects that will reduce the flood risk—and, in turn, reduce the premium—before putting a property on the market  Provide an Elevation Certificate For more information, visit FEMA.gov/flood-insurance-reform. Recent Legislation

 Most homeowners insurance does not cover flood damage.  Typically, there is a 30-day waiting period for policies to go into effect.  Anywhere it can rain, it can flood.  In high-risk areas, you have at least a 1 in 4 chance of flooding over the course of a 30-year mortgage.  Moderate- to low-risk areas account for more than 20 percent of NFIP claims. Key Points for Clients

Check with the community floodplain management office for more information on mitigation activities, such as  Floodproofing  Installing flood vents  Elevating:  Home  Equipment and appliances (e.g., heating, cooling washer, dryer) Reduce the Risk, Reduce the Cost

Resources for You

Resources FloodSmart.gov FEMA.gov msc.fema.gov

FloodSmart Tools and Resources Talking Points on Agents.FloodSmart.gov Interactive Tools and Testimonials

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