Is flood insurance required? The federal purchase rule and what it leaves out
Pick a state and a zone type: the median single-family bill on July 31, 2026 for the homes that buy in that kind of zone.
Median yearly cost, X, B and C zones, Texas
$1,067
Single-family policies in force on July 31, 2026, OpenFEMA.
| Same zone type, whole country | $958 |
| A zones in Texas | $1,232 |
| V zones in Texas | $1,987 |
The zone no longer sets the price under Risk Rating 2.0; it still decides whether a lender must require a policy.
Compiled by Radif Partners · Where the numbers come from · FEMA and OpenFEMA files, rules read in 42 U.S.C. and 44 CFR · not a quote
Flood insurance is required by federal law when a building in a Special Flood Hazard Area, the A and V zones of FEMA's map, secures a loan from a federally regulated lender, a federal agency lender, or a loan sold to Fannie Mae or Freddie Mac, in a community where federal flood insurance is available. The rule is 42 U.S.C. 4012a and the zones are listed in 44 CFR 64.3(b). The amount must be at least the outstanding principal balance of the loan or the maximum coverage available for that type of building, whichever is less: $250,000 for a house's structure. When federal financial assistance helped buy or build the house, the duty to keep a policy lasts for the life of the property, even after a sale. Outside A and V zones, no federal rule requires a policy. Yet those zones produced 29 % of the single-family claims the program paid for floods of 2016 to 2025.
The rule in one sentence
Under 42 U.S.C. 4012a(b), a regulated lender may not make, increase, extend or renew a loan secured by a building or a mobile home in an area FEMA has identified as having special flood hazards, in a community where flood insurance is available, unless the building is covered by flood insurance for the term of the loan. Each part of that sentence narrows it. It needs a loan: a house owned outright, with no mortgage, falls outside it. It needs a building in a mapped high-hazard area, the Special Flood Hazard Area. And it needs a participating community, since the rule refers to insurance made available under the National Flood Insurance Act.
Three kinds of lenders are bound: lending institutions regulated by the federal agencies (the FDIC, the OCC, the Federal Reserve, the NCUA and the Farm Credit Administration); federal agency lenders; and the government-sponsored enterprises, Fannie Mae and Freddie Mac, for the loans they buy. Since July 1, 2019, those lenders must also accept a private policy that meets the statutory definition, as the joint rule sets out and the private flood insurance page explains.
Which zones trigger it
44 CFR 64.3(b) lists them: A, A1 to A30, AE, A99, AO, AH, the AR family, V, V1 to V30, VE and VO, plus the old M and E codes. Every one of those areas has at least a 1% chance of flooding in a given year, a 26 % chance over a 30-year mortgage in FEMA's own terms. Zones X, B, C and D are not on the list. The flood zones page explains each letter.
How much coverage the lender can demand
The required amount is the lesser of two figures: the outstanding principal balance of the loan, or the maximum coverage the program offers for that kind of building. For a single-family home the maximum is $250,000 on the structure, so a borrower who owes $180,000 must carry at least $180,000 of building coverage, and one who owes more than $250,000 must carry the full $250,000. The house's market value is not the measure. Contents coverage enters the rule only when personal property secures the loan, along with the building.
Because the policy is bought at the closing in connection with the loan, the usual waiting period does not apply: cover starts when the loan closes.
Bought at closing: when does cover start?
Would the policy pay for that flood?
Yes
| Rule applied | Bought with a mortgage loan: starts at closing |
| Waiting period | 0 days |
Federal assistance comes with a lasting condition
The statute has a second trigger that has nothing to do with a mortgage. Under 4012a(a), no federal agency may approve financial assistance for acquisition or construction in a high-hazard area where flood insurance is available unless the building is insured. The statute adds that the requirement of maintaining flood insurance applies during the life of the property, regardless of transfer of ownership, so a buyer can take it over with the house. Asking the seller whether federal assistance was ever received on the building is the way to find out.
The exceptions written in the law
The statute exempts a few cases from the lender rule: property owned by a state that insures itself, very small loans with a repayment term of one year or less, and, on residential property, a structure detached from the main home that does not serve as a residence. A paid-off mortgage ends the federal requirement for that loan; a lapse of cover after that point does not cost a Pre-FIRM discount, under the manual's exception for owners who were no longer required to carry a policy.
Outside the high-risk zones: no rule, real claims
For a house in an X, B or C zone, no federal rule requires flood insurance, whatever the mortgage. Owners there buy by choice. On July 31, 2026, X, B and C zones accounted for 43 % of the program's single-family policies, with a median bill of $958, against $1,197 in A zones.
The claim files show why the zone line is not a dry line. Of the single-family claims paid for floods of 2016 to 2025, 29 % came from outside A and V zones. In some states the share is higher still: Texas (56 %), New York (39 %), Virginia (38 %). These counts include only the owners outside the zones who held a policy when the water came.
The calculator at the top shows the median bill by zone type in any state, a starting point before asking a licensed agent for a quote on a specific house.