FAQ: Flood Insurance Basics

Learning the Flood Insurance Basics will help you to evaluate your flood risk and, if you qualify, to take advantage of flood insurance savings.

Who Decides Whether I Have to Carry Flood Insurance?
How Do I Know If I Am Still Required to Buy Flood Insurance?
How Do I Find My Current Flood Zone?

Who Decides Whether I Have to Carry Flood Insurance?

• The Federal Emergency Management Agency (FEMA): Initially, the Federal Emergency Management Agency determines whether you have to carry flood insurance. With the help of the U.S. Army Corps of Engineers and local flood control officials, FEMA creates Flood Insurance Rate Maps. These maps are divided into zones that show the different levels of flood risk in Sacramento and in communities across the country.
  
  
• Flood Insurance Is Required in High Risk Flood Zones: Federal law requires you to purchase flood insurance if (1) you carry a Federally-insured mortgage, and (2) your property is located in a high risk flood zone. Some examples of these zones are AR, A99, A1-A30, AE, AO and AH. Your lender enforces this requirement.


• Flood Insurance Is Recommended but Not Required for Property in Moderate Risk Flood Zones: FEMA does not require flood insurance for property in moderate risk areas called B, C or X flood zones. However, lenders may legally require flood insurance regardless of the property owner’s flood zone.
  
  
• Your Lender: Lenders order a flood zone determination each time you buy or refinance a home or building located in a floodplain. This flood zone determination pinpoints the level of flood risk to your property.
  
  Under Federal law, lenders must require flood insurance for property that is located in high risk flood zones. In addition, Federal law allows lenders to require flood insurance for property that is located in moderate risk B, C or X flood zones. In California, most lenders will not require flood insurance in B, C or X flood zones. However, your lender can legally require you to carry flood insurance, even if your property has been removed from the Federal flood insurance requirement.
  
  
• You: If your property has been released from this requirement, or if you have purchased a home or building in a neighborhood where flood insurance is no longer required, it is up to you to decide whether to carry flood insurance. As you make this important decision, please keep in mind:


• A Significant Flood Risk Remains. Improvements to local flood controls have reduced but not eliminated the flood risk to property located in the American River and Natomas floodplains. These areas are protected by levees that can still be overtopped or collapse in severe winter storms. Click here to view these floodplains, which are shown in green on "Map: Flood Risk in the Sacramento Metropolitan Area."


• Homeowners Insurance DOES NOT Cover Damage Caused by a Flood.


• The U.S. Army Corps of Engineers, the Sacramento Area Flood Control Agency and the California State Department of Water Resources Urge You to Carry Flood Insurance If Your Home or Building Is Located in Either a High or Moderate Risk Flood Zone. Click here to view "Map: Flood Risk in the Sacramento Metropolitan Area."


• Low-Cost Flood Insurance Is Available to Most Property Owners in Areas with a Moderate-Level Flood Risk.
  Click here to view a flood risk map of the Sacramento area.
  Click here for information on low-cost flood insurance.


• Most Federal Disaster Assistance Must Be Repaid: In most cases, the Federal government issues disaster assistance to flood victims in the form of low-interest loans. If you receive one of these loans, you must repay it in addition to any mortgage you already carry on your home or building.


• Don’t Risk Your Most Important Investment—Your Home: You are not required to buy flood insurance if you: (1) Have paid off or do not carry a mortgage on your property, or (2) Carry a loan that is not Federally-insured. However, if your property has a high or moderate risk of flooding, SAFCA strongly urges you to carry flood insurance, regardless of your mortgage status. Should a flood occur, flood insurance can make the difference between rebuilding or loosing your home.
  

• Flood Insurance Is Still Required: FEMA still requires flood insurance for property located in the South Area, which includes the Meadowview and Pocket communities. The South Area has a high-level flood risk and is shown in blue on "Map: Flood Risk in the Sacramento Metropolitan Area." In addition, your lender can legally require flood insurance regardless of the level of flood risk to your property.


• Flood Insurance Is Recommended but Not Required: Flood insurance is recommended but not required for most property located in the green, moderate-risk area shown on "Map: Flood Risk in the Sacramento Metropolitan Area."

1. Convert to a Low-Cost Preferred Risk Policy: By switching to a low-cost Preferred Risk Policy, you can save money and insure your home or building and belongings against damage caused by a flood. Preferred Risk Policies cost about half the price of a regular, or Standard, flood insurance policy and are sold by the same agents who sell Standard flood insurance. (For most people, this is the agent who writes their Homeowners policy.) For more information, please see "How to Get a Low-Cost, Preferred Risk Flood Insurance Policy."


2. Keep Your Standard Flood Insurance: If your property has been released from the Federal flood insurance requirement, you must contact your insurance agent to apply for Preferred Risk savings. Your agent will not automatically switch you to a lower-cost Preferred Risk Policy. If you do nothing—in other words, if you make no changes to your current policy—you will continue to carry Standard flood insurance. In Sacramento, Standard flood insurance costs about twice as much as Preferred Risk flood insurance. However, despite this price difference, Standard and Preferred Risk policies provide identical protection against damage caused by flooding.


3. Cancel Your Flood Insurance: With your lender's written permission, you can cancel your flood insurance. In the short term, cancellation will save you money. However, in the long term, it could cost you dearly. Keep in mind: Homeowners insurance DOES NOT cover damage caused by a flood. And if your property should flood, repairs could cost more than 50 percent of the value of your building or home.

• If your property is located in the City of Sacramento, please phone the City's Floodplain Information Line at (916) 808-5061.


• If your property is located in the unincorporated area of Sacramento County, please phone the County's Flood Zone Information Hotline at (916) 874-7517.

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