I never thought flood zones would apply to me. Turns out, my Minneapolis house is half a block away from a hazard flood zone due to a small creek, and the zone has grown larger in recent years. I haven’t had flooding and don’t have flood insurance, which wasn’t required when I took out a mortgage.

When the time comes to sell my house, closing could be a mess for buyers unaware of flood zones. They may learn flood insurance is required because the updated map shows my property in the flood zone. Flood insurance can cost the buyer up to $2,000 a year.

“That’s sticker shock in a stressful time,” says Ceil Strauss, flood plain manager for the state of Minnesota. “The more that people look at flood zones and flood insurance early in the process, the better.”

What Is a Flood Zone?

The Federal Emergency Management Agency (FEMA) says everyone lives in an area with some flood risk. Therefore, FEMA has flood zones for each community, and each zone describes the risk for a particular area.

What Is a Flood Zone Map?

FEMA’s maps illustrate a community’s flood zone and floodplain boundaries, and thus its flooding risk. These maps help insurance agents and lenders determine flood insurance requirements and policy costs.

To find out if your home is in a flood zone, check the FEMA Flood Map Service Center. Enter your address and a map appears with a red pin marking your home’s location relative to flood hazard areas. These appear as color-coded overlays.

The National Flood Insurance Program (NFIP) and FEMA work with communities to update maps by identifying land and water changes. But some FEMA maps haven’t been updated in decades. Plus, the maps may be too general.

“A corner of a property may be in a hazard flood zone, so the entire property is considered in the hazard zone,” Strauss says. “But the house and buildings may be on an elevated portion of the property and not at risk for flooding.”

For clarity, you can submit a letter to FEMA, detailing flood risk variables like flood frequency, river overflow, storm surge, coastal erosion, heavy rainfall and distance to a water source. “But settling this with FEMA can take up to 60 days, which doesn’t help people when they have a closing in a week,” says Strauss.

What Is Flood Insurance and Do You Need It?

Flood insurance is a separate policy that can cover a building, its contents, or both. Here are four potentially surprising truths about flood insurance.

  1. Not every homeowner insurance policy includes flood insurance: Policies usually don’t cover water damage from a source outside your home, like flooding.
  2. Hazard insurance doesn’t always cover flooding: The hazard insurance section of a standard homeowner policy doesn’t cover flooding from external natural causes like heavy rainstorms, or man-made ones like a dam break. Only separate flood insurance can protect against that sort of destruction or damage.
  3. Hurricane insurance is not another name for flood insurance: Flood insurance covers water coming into your home from off your property. Hurricane insurance is for wind damage, not flooding, from a storm with winds of more than 74 mph.
  4. Flood insurance isn’t available for all homes: Check the FEMA site for a list of flood insurance providers. Flood insurance is available to anyone living in the 23,000 communities participating in the NFIP. The program works with communities to adopt and enforce floodplain management regulations that help mitigate flooding effects.

How To Know If You Need Flood Insurance

Many homeowners live in arid or elevated areas and don’t need flood insurance. But don’t dismiss flood insurance out of hand. These factors determine if you need or should strongly consider flood insurance:

  • Homes in high-risk flood areas with government-backed mortgages are required to have flood insurance. While flood insurance is not federally required if you live outside of the high-risk area, your lender may still require it.
  • Federal disaster assistance comes as a loan, which must be paid back with interest, or as a FEMA disaster grant, which averages about $5,000 per household. The average flood insurance claim in 2018 was more than $40,000.
  • Poor drainage systems, summer storms, melting snow, neighborhood construction and broken water mains can result in a house flooding. In high-risk areas, there’s at least a one-in-four chance of flooding during a 30-year mortgage, FEMA says. From 2014 to 2018, policyholders outside of high-risk flood areas filed more than 40 percent of all NFIP flood insurance claims and required one-third of federal disaster flooding assistance.
  • It’s likely landlords have flood insurance covering their buildings, but not the contents.

What Are Flood Zone Categories?

Insurers use the following flood zone categories to help determine flood risk.

  • Zone A: Property is in a flood hazard area that’s not coastal.
  • Zone B: Moderate flood hazard risk.
  • Zone C: Minimal flood hazard risk.
  • Zone D: Possible risk of flooding, but hazard level is undetermined.
  • Zone V: High risk for floods in coastal areas.
  • Zone X: With newer maps, Zones B and C are identified as Zone X.