You are in the process of buying a home, and your loan officer or your Realtor® calls to tell you that the property you are buying is in a flood zone. As a result, your lender has added an underwriting condition that requires you to obtain flood insurance before giving final approval on your loan.

Did your heart just miss a beat? Did an image of you wading through rising waters inside your home just flash in your mind? What does it mean when your home is in a flood zone?

The truth is everyone lives in a flood zone! It is the risk of flooding that varies by area, and this is determined by the Federal Emergency Management Agency (FEMA). A flood zone may be categorized into three risk levels:

            - low risk
            - moderate risk
            - high risk

In mortgage terms, it is when your property is located in a “high risk” flood zone that flood insurance becomes mandatory.  A high risk area is also called a Special Flood Hazard Area (SFHA) and is predicted to have a 26 percent chance of suffering flood damage during the term of a 30-year mortgage.

For those whose homes are not in a SFHA, it is important to be aware that you are still at risk of flooding, although not to the same degree as high risk areas. Don’t be deceived by classifications. According to FEMA, historically, one out of four floods occurs in non-SFHAs. As a homeowner, you have the option of obtaining flood insurance and choosing the type of coverage you feel is appropriate to give you some level of comfort for when those rainy days come (literally!).