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Keighbor / Glossary / Taxes & insurance

Flood insurance

A separate policy covering flood damage. Required by lenders for homes in FEMA-designated flood zones. Available through the National Flood Insurance Program or a growing private market.

Taxes & insurance · Updated September 2026

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Where this comes up: under contract

This word belongs to the under contract part of a sale. Here is what that part holds, in order.

  1. Go under contractSign the purchase agreement · Confirm earnest money is deposited
  2. Buyer's inspectionCoordinate access for the inspector · Give the inspector clear access
  3. Title workOpen title with your closing team · Review the title commitment
  4. Settle repairsDecide what you'll fix and what you'll credit · Collect contractor quotes

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Part 1 of 4

Why a seller cares

If the home is in a mapped flood zone, the buyer's lender will require a flood policy, and the premium becomes part of what the buyer can afford. Your existing policy may be transferable, which can save the buyer money.

Part 2 of 4

A simple example

Your home is in a FEMA zone AE with a $1,900-a-year flood policy. The buyer's lender asks for coverage before closing, and your policy can be assigned to them.

Flood insurance: a simple example
The situationWhat follows
A mapped zone and an existing policyThe buyer can often take over your policy and its rate
A mapped zone and no policyThe buyer buys one; the quote can be a surprise
Outside the mapped zonesOptional, and cheap, and lenders do not ask

In a flood zone, flood insurance is a loan condition. An assignable policy is a favor to the buyer.

Part 3 of 4

What people get wrong

That being outside the zone means no flood risk. It means no lender requirement; water does not read the map.

Part 4 of 4 · where to read next

Where it appears in the sale

What happens after you accept an offerUnder contract · the stretch of the sale this word belongs to

What a definition is, and what it isn't

Keighbor is a software company, not a law firm, brokerage, or tax adviser. This is general information, not legal, tax, financial, or real estate advice about your sale. Your situation may differ. Before acting on a contract, disclosure, title, tax, or pricing question, ask an appropriately licensed professional in your state.

Written and researched by Keighbor Research · read against FEMA: flood maps · how we research and check what we publish

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