Adding Flood Insurance to a Loan Scenario

Overview

Properties in certain geographic areas require flood insurance as a condition of the mortgage. Deal Details automatically checks flood zone status when you look up a property and alerts you when flood insurance is likely required. Adding this cost to your scenario ensures your client sees a complete, realistic picture of their monthly payment obligations from the start.

Before You Start

Requirement	Details
Property address entered	The property must be loaded into your scenario for flood zone lookup
Flood insurance quote or estimate	Have the annual flood insurance premium amount ready (check with insurance providers or use local averages)

Step-by-Step: Adding Flood Insurance

1. Look Up the Property

Enter the property address in your loan scenario
Deal Details automatically retrieves flood zone information for the property

2. Check the Flood Zone Indicator

Look for the Flood Zone Information section in the property details
If the property is in a flood-prone area, you'll see an indicator that flood insurance is required

⚠️ Important: Properties showing a flood zone indicator will almost certainly require flood insurance for loan approval. Build this cost into your quote from the beginning to avoid surprising your client later.

3. Add the Flood Insurance

Locate the blue Add Additional Insurance link
Hover over it to reveal the dropdown options

Option	When to Use
Add Flood Insurance	Property is in a designated flood zone
Add Wind and Storm Insurance	Property requires separate windstorm coverage (common in coastal areas)

4. Enter the Premium Amount

Click Add Flood Insurance
A new input field appears in the insurance section
Enter the annual flood insurance premium as a flat dollar amount

💡 Tip: If your client doesn't have a quote yet, use local averages as a placeholder. National Flood Insurance Program (NFIP) premiums typically range from $700 to $3,000+ annually depending on flood zone designation and property value.

How It Affects the Scenario

Once you add flood insurance, the premium automatically factors into the loan calculations:

Impact Area	What Happens
Monthly Payment	Flood insurance is divided by 12 and added to the total monthly housing expense
Expanded Scenario View	The flood insurance line item appears separately so clients see exactly what they're paying
Escrow Calculation	If escrowing, flood insurance is included in the escrow portion of the payment

Finishing Up

1. Verify the monthly payment

Review the updated payment amount in your scenario summary
Confirm the flood insurance premium displays correctly in the expanded view

2. Communicate with your client

Explain why flood insurance is required for this property
Note that flood insurance is separate from standard homeowner's insurance
Discuss options for obtaining quotes from insurance providers

Quick Reference

Enter Property Address → Check Flood Zone Indicator → Click Add Additional Insurance → Select Add Flood Insurance → Enter Annual Premium → Review Updated Payment

Tips for Success

Get ahead of the conversation — When working with properties in coastal or low-lying areas, check flood zone status early so you can discuss insurance costs upfront with your client.
Use realistic estimates — Underquoting flood insurance creates problems at closing. When in doubt, estimate higher and let clients be pleasantly surprised if the actual premium is lower.
Consider both coverages — Some properties, especially in hurricane-prone regions like Florida's Gulf Coast, may need both flood and wind/storm insurance. Add both if applicable to give your client the complete picture.
Remember the escrow impact — Flood insurance premiums can significantly increase the monthly escrow amount. Make sure clients understand this is part of their total monthly obligation, not an optional add-on.
Check for private flood options — While NFIP is the traditional source, private flood insurance may offer better rates for some properties. Encourage clients to shop around.