Lender Requires Flood Insurance in a non Flood Plain

[John Cantu]

Hello BP,

I am purchasing an investment property from the owner himself, who is also an investor. He is requiring the flood insurance to be paid for the year at closing but the property is not in a floodplain. In fact when I got the quote for it, the insurance agent seemed weirded out by the request. I can't really think of any reason he would want this. And as the owner of the home would I not be the one responsible for any damage to the property in the event of a flood anyways? 

I'm not dealing with the owner directly but an agent and so I'm trying to get some clarity as to why someone would request this. Any insight helps. 

Thanks!

[Nicole Marshall]

I would assume this has something to do with Hurricane Harvey. Most people that were affected didn't technically live in a flood zone and therefore didn't have flood insurance and they lost everything. I live a half-mile from the ocean, I don't live in a flood zone, but I still get flood insurance every year. Storm surge is considered flood water, so all it would take is one storm to ruin everything.