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Realtors have duty to warn clients of flood risk, experts say

By Mike Wheatley | November 10, 2016

Floods are widespread throughout the nation, with Hurricane Matthew and this summer’s flooding in Louisiana serving as the latest examples.

Home buyers need to be aware of the threat that flooding poses to their investment, as well as to their safety, and realtors can play an important role in helping clients address that risk before disaster strikes.


Melanie M. Graham of H2O Partners told an audience at the 2016 Realtors Conference & Expo in Orlando, Florida, that “every building you will be working with has a need to be protected.”

Graham reminded realtors in attendance that all property owners have the option to purchase flood insurance, not simply those in high-risk areas. In many cases, she added, that coverage is relatively affordable.

Floods in lower risk zones are fairly common, according to Graham. She said 20 percent of National Flood Insurance Program claims occur in low- to moderate-risk zones, receiving one third of overall flood disaster assistance. Graham also reminded the audience that a disaster declaration alone may not result in a payout for property owners, calling the idea a myth. Instead, she said having a flood insurance policy in hand is critical to protecting property owners when disaster strikes.

Maria Wells, chair of the National Association of Realtors’ Insurance Committee, moderated the event. She reminded the audience of realtors’ role in educating clients about flood risk to their property. Wells suggested that realtors find a good insurance agent they can trust and get to know their state floodplain manager so they have a place to ask questions.

“When we’re working with our buyers, it’s important to inform them of the devastation that can occur if they aren’t covered,” said Wells. She said of buyers in low- and moderate-risk areas who decide against purchasing flood insurance, “that’s a really big mistake with what we know now.”

NAR supports a range of policy solutions to ensure access to affordable flood insurance. Among them, NAR supports an extension of the NFIP before it expires in September of 2017, as well as mitigation efforts that protect homeowners before a flood strikes. Earlier this year, NAR also supported House-passed legislation that would allow homeowners to move seamlessly between the NFIP and private insurance markets without the risk of an arbitrary rate increase.

NAR President Tom Salomone said following the event that it’s important for realtors to keep flood insurance policy in the spotlight so homeowners can protect their families and their property.

“Floodwaters continue to threaten homes around the country, but the clock is ticking to reauthorize the NFIP,” said Salomone. “As NAR works with leaders in Washington to reauthorize the program, realtors in the field are doing their part to educate themselves and their clients on how they can best protect their homes, their investments, and their families.”

Mike Wheatley is the senior editor at Realty Biz News. Got a real estate related news article you wish to share, contact Mike at [email protected].
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