Here is a PDF from the National Association of Realtors (NAR) with guidance as to what real estate agents/broker responsibility is regarding flood insurance. We are not insurance agents and with the changes in flood insurance this past year we can not be giving any advise to a buyer or seller regarding flood insurance…out of our sphere of knowledge. Just like I couldn’t do a mortgage for a buyer because I am not trained in doing so, I can’t discuss or advise about flood insurance because it is also out of my training. I am not licensed to do insurance or to do mortgages. Now just like we always provide a list of home inspectors NAR is recommending that we provide a list of insurance carriers as well…NAR is a national organization and each state has different laws – so please use this as general guidance and verify specific to the state you are thinking of buying in..
‘Brokers and agents should not recommend or endorse any particular carrier, and it is prudent to identify more than one carrier and encourage interested buyers to compare flood insurance coverage among several different carriers”
The PDF from NAR:
- In general, brokers and agents owe buyers duty to disclose adverse material features, conditions, or aspects of property of which they have actual knowledge. Brokers and agents are not, however, generally required to investigate independently whether a property is in a flood zone or otherwise in an area likely to be subject to flooding or flood risks. However, if a broker or agent has actual knowledge that a property being marketed for sale is in an area where flood insurance is required or has specific knowledge that flood insurance has been required for that particular property in the past, those facts should be disclosed to the buyer. If the broker or agent has actual knowledge that the area in which the property is located has experienced flooding or is subject to flood risks that cause many or most owners to purchase flood insurance those facts should also be disclosed.
- If a broker or agent determines that it is necessary to make disclosures to buyers regarding flood insurance, as described above, he should also advise buyers that, as a result of the B-W Act, flood insurance rates are likely to be higher than in the past. Although the amount of such rate increases may be lower than they would have otherwise been under the B-W Act alone, increases will nevertheless be implemented with the goal of reaching full market based premium amounts in time.Such advice should further indicate that notwithstanding the 2014 Homeowner Flood Insurance Affordability Act, prior flood insurance premiums will not be representative of future rates and that rates will increase, although more slowly than anticipated under the B-W Act. An example of a disclosure statement that could be used for this purpose is attached, although brokers and agents may also use different methods or language to communicate to buyers information about flood insurance and flood insurance premiums. In circumstances where flood insurance is not required and there is no reasonable basis for a broker or agent to believe that it may be required or is prudent to have, no such disclosure need be provided.
- For buyers who seek more information about the NFIP or flood insurance coverage or rates, the broker or agent should be prepared to provide sources of information about those subjects available from “official” sources or those otherwise known to be competent and reliable. These might include publications, pamphlets, or similar materials prepared or distributed by FEMA or other federal or state agencies or departments, or other sources known to be credible. Examples of such publications can be found at the following links: