As of Tuesday afternoon at least 1,000 homes had flooded in Harris County and six fatalities were reported in one of the most devastating natural disasters in the area. While it’s certainly a time to reflect on one’s own safety and the safety of their loved ones, it’s also important to know how to protect your clients in a similar event in the future.

  • Typical homeowner insurance policies don't cover floods.
  • Homeowners need to ensure they have proper flood coverage, as certain situations aren't covered by all insurance plans.
  • New NFIP flood insurance premiums took effect on April 1.

As of Tuesday afternoon, at least 1,000 homes had flooded in Harris County and six fatalities were reported in one of the most devastating natural disasters in the area. While it’s certainly a time to reflect on one’s own safety and the safety of their loved ones, it’s also important to know how to protect your clients in a similar event in the future.

Because Houston homeowners’ insurance policies typically do not cover floods those not required to obtain flood insurance may be in a stressful situation, wishing they would have obtained coverage.

Oftentimes, real estate agents can play a vital roll in a homeowner’s decision to obtain flood insurance — even if they live within a low-risk zone.

It is recommended by numerous outlets that all agents encourage homeowners or recent homebuyers to obtain flood insurance via the National Flood Insurance Program (NFIP), a federal program that allows flood coverage to be purchased through a number of insurance companies.

Homeowners can access their home’s flood risk by assessing the Federal Emergency Management Agency’s (FEMA) flood maps.

Breaking down flood insurance

When obtaining coverage through an insurance company, a real estate agent can alert clients of mitigation techniques that will lower their rates. These tactics include home elevation, grants, loans and various policy benefits.

If a community participates in the Community Rating System (CRS), homeowners may qualify for an insurance premium discount depending on the level of risk within their community.

Agents can also ensure a homeowner obtain the proper coverage, as some situations that cause flooding, a sewer backup, are only covered by flood insurance if they’re a direct result of flooding. The resulting damage is not coverage if the backup was caused by another problem.

For homeowners looking to sell, having existing, transferable flood insurance can make a home more marketable. It is also recommended that a seller obtain an elevation certificate that will detail to a potential seller the full risk of the home. In short, it’s important for a seller to disclose all potential flood risk upfront.

Unfortunately, homeowners seeking new flood insurance must wait for 30 days from the date of the purchase before a policy goes into effect. However, if flood insurance is purchased in connection with making, increasing, extending or renewing a loan, there is no waiting period.

New rates

As of April 1, 2016, NFIP premium rates rose an average of 9 percent, with some individual property owners seeing a rate increase up to 18 percent for newer properties and 25 percent for older ones.

According to the National Association of Realtors, FEMA will begin requiring insurance companies to re-underwrite NFIP policies in order to determine if the underlying properties are being rated based on the most current flood map.

Email Erik Pisor

Show Comments Hide Comments

Comments

Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Hear from Realogy, Pacaso, SERHANT., Spotify, Redfin, Douglas Elliman, and 100+ more leaders at ICNY.Register now×
Limited time: Get 30 days of Inman Select for $5.SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription