Flood Insurance for New Construction: What to Know Before You Build

If you're building a new home, flood insurance is a question that starts before you ever break ground. The flood zone and Base Flood Elevation (BFE) of the lot affect how the home should be built and how a flood policy on it will later be underwritten, so it's worth looking into both before you buy the land.

This article covers what to check before buying a lot, how elevation and construction timing come into play, and what to ask your agent about coverage during the build itself.

Check the Flood Zone and BFE Before Buying the Lot

Before you commit to a piece of land, find out what flood zone it sits in and, if one is published, what the Base Flood Elevation is for that location. A lot in a Special Flood Hazard Area (an A or V zone) carries different considerations than one in an X zone, and the BFE gives you a number to design and build against.

This is also the point to check whether the lot falls inside a Coastal Barrier Resources Act (CBRA) zone. The NFIP is not available in CBRA zones, which matters if you're planning to rely on an NFIP policy later. Sterling writes CBRA flood coverage, so it's worth raising with your agent early.

How Elevation Relative to the BFE Affects Underwriting

Once a home exists, the relationship between its lowest floor and the BFE is one of the biggest factors in how a flood policy is underwritten. A home built with its lowest floor above the BFE is generally viewed differently than one built at or below it. This is true whether the underwriter is working from an elevation certificate or from the flood map and foundation type alone.

Because this relationship matters so much, it's worth thinking about elevation as part of the design process, not as something to check after the home is finished. Architects and builders working in flood-prone areas are generally familiar with these considerations and can help you think through options for the foundation and finished floor height.

Post-FIRM Construction and the Map in Effect

A building constructed on or after its community's first Flood Insurance Rate Map (FIRM) took effect is called post-FIRM. Post-FIRM buildings were built under rules that generally required the lowest floor to be at or above the Base Flood Elevation, which is one more reason the BFE belongs in the design conversation. The pre-FIRM versus post-FIRM distinction shows up in underwriting, so keep a record of when construction started.

Elevation Certificates During Construction

An elevation certificate is a FEMA form, completed by a licensed surveyor, that records how a building's elevations compare to the BFE. For new construction, ask your surveyor or builder when in the project a certificate should be completed so you have one on file once the home is finished.

Sterling does not require an elevation certificate to quote. Even so, having one on file, once the home is built, can give an underwriter measured numbers to work from rather than relying on the flood map and foundation type alone.

Flood Openings and Equipment Placement

If the home will have an enclosed area below the lowest floor, such as a garage or storage space under an elevated structure, that enclosure generally needs flood openings so water can move through it rather than building up against the structure. Talk with your builder about how the enclosure is designed before construction finishes, since this is far easier to address during the build than afterward.

It's also worth planning to keep major equipment, air handlers, water heaters, electrical panels, elevated above the lowest anticipated flood level where possible. Equipment placed low in a structure is more exposed, and where it sits can matter later.

Lender Requirements for New Construction

If you're financing the build, keep in mind that federally regulated lenders require flood insurance on a structure in a Special Flood Hazard Area as a condition of the loan. This requirement generally applies to new construction the same way it applies to an existing home, so it's worth confirming with your lender early what they'll require once the home is built and the loan is in place.

Ask Your Agent About Coverage During Construction

A home under construction is a different question from a finished home, and coverage during the build, for the structure, materials on site, or both, is something to raise directly with your agent rather than assume. Ask early, before the first phase of construction begins, so you understand what's in place throughout the build and what changes once the home is finished and occupied.

Common Mistakes People Make Building in Flood-Prone Areas

• Buying the lot before checking the flood zone and BFE. This information should shape the design, not arrive as a surprise after the land is purchased.
• Treating elevation certificates as an afterthought. A certificate on file once the home is built can give an underwriter better information than the map alone.
• Designing an enclosure without flood openings. An enclosure without the right openings is often treated differently than one that has them.
• Placing equipment at the lowest point in the structure. Equipment sitting low is more exposed, and where it sits can affect underwriting later.
• Assuming coverage during construction is automatic. It's a separate conversation to have with your agent before the build starts.

Pro Tips from Sterling Flood Underwriters

Ask about the BFE before you fall in love with a lot. It's far easier to factor elevation into a decision before you own the land than after.

Keep your construction records. Elevation certificates, builder records and photos from different stages of the build can all help later when you request a quote.

Loop in your agent early, not at closing. Raising flood insurance questions while you're still designing gives you more options than raising them once the home is finished.

Get a Quote

Building new doesn't mean starting from scratch when it comes to flood coverage. Get a flood insurance quote from Sterling Flood.

Frequently Asked Questions

Do I need an elevation certificate to get a quote on new construction?

No. Sterling does not require an elevation certificate to quote. One can still be useful once the home is built, since it gives the underwriter measured numbers rather than relying on the map and foundation type alone.

What is post-FIRM construction?

It refers to a building constructed on or after its community's first Flood Insurance Rate Map took effect. A newly built home is typically post-FIRM, and it's worth keeping a record of when construction started.

Why do flood openings matter for new construction?

An enclosed area below the lowest floor, such as a garage under an elevated home, generally needs flood openings so water can move through it instead of building up against the structure. This is far easier to design in during construction than to retrofit later.

Will my lender require flood insurance on a new home?

If the property sits in a Special Flood Hazard Area and the loan is through a federally regulated lender, flood insurance is generally required as a condition of the loan. Confirm the specifics with your lender as the build progresses.