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Colorado Flood Insurance Requirements

Bovo Law Sept. 19, 2013

Colorado Flood Insurance Requirements

If you are a Colorado property owner who has property affected by the recent flooding, I am sure you have a lot of questions regarding flood insurance. In a previous post, we posted the entire list of all 246 Colorado communities that participate in the National Flood Insurance Program (NFIP) administered by the Federal Emergency Management Agency (FEMA). We also posted the 16 communities that do NOT participate in the program. Even if your community participates in the NFIP you are not covered unless you specifically purchased a flood insurance policy.

According to the NFIP homes and buildings in high-risk flood areas with mortgages from federally regulated or insured lenders are required to have flood insurance. In high-risk areas, there is at least a 1 in 4 chance of flooding during a 30-year mortgage. Homes and businesses located in moderate-to-low risk areas that have mortgages from federally regulated or insured lenders are typically not required to have flood insurance. However, flood insurance is highly recommended because anyone can be financially vulnerable to floods. People outside of high-risk areas file over 20% of NFIP claims and receive one-third of disaster assistance for flooding. When it’s available, disaster assistance is typically a loan you must repay with interest. A lender can require flood insurance, even if it is not federally required.

According to FEMA only about 22,000 homeowners in the entire state of Colorado have flood insurance.