REALTOR Tina Golon

© Caleb Kenna

A babbling brook in Waterbury, Vt., pictured here behind REALTOR® Tina Golon, made her clients' nearby property subject to federal flood insurance requirements.

Lifeline for a Flood of Obstacles

In the face of a changing climate, one agent encouraged clients to fight back against excessive flood insurance requirements.

A year after Tropical Storm Irene's floodwaters submerged nearly every town in Vermont, Tina Golon was shocked by how much some home owners' expenses increased. In the wake of the historic 2011 storm, flood zones were remapped to include a wider area across the state, and insurance rates for affected home owners spiked. The changes were more severe than Golon expected.

Even a home in the mountains that Golon's clients bought in 2012 suddenly fell into a flood zone and was subject to mandatory—and expensive—flood insurance. Though it was above flood level, the couple's lender said a five-foot-wide brook behind the property posed a flood risk. Despite the fact that the $129,000 home had never been damaged by a flood since it was built in 1850, the bank forced the couple to buy a $2,171-a-year insurance policy.

"This is continually a last-minute problem where the banks make the rules and require flood insurance at their own discretion," says Golon, a sales associate with Century 21 Jack Associates in Waterbury, Vt. "This is a problem particularly for young couples on a budget, and it blows deals apart all the time."

Golon's clients didn't even get the worst of it. Right after the Biggert-Waters Act began phasing out federal flood insurance subsidies in 2012, the average cost of a residential policy in Vermont jumped from $1,600 a year to $4,000, according to the Vermont League of Cities and Towns. Upon learning that many of these rate hikes were inaccurate and were based on misinterpretations of the law by banks and insurance companies, the National Association of REALTORS® demanded a slowdown in the increases. As a result, Congress amended the law to allow for incremental rises of 18 percent to 25 percent annually until the costs reflect a property's true flood risk.

Still, that's an added expense many Vermont home buyers aren't willing to pay on top of the state's property taxes, which are among the 10 highest in the country. It's also zapping owners whose premiums have gotten so expensive that they can't afford their homes anymore—but they can't find buyers who will take on the financial burden.

Golon says flood maps are overestimating the number of homes situated in truly high-risk flood zones, and she's worried too many owners are unfairly burdened by insurance costs. She recognizes that Vermont is facing serious effects of climate change—more dangerous flooding with increasing precipitation is expected in the coming years, according to the Vermont Agency of Natural Resources—but she contends there are cases where the costs are excessive. "I don't imagine a storm like [Irene] will happen in Vermont again in my lifetime, so the coverage some people have to have is ridiculous," she says.

How to Fight Back

Now Golon is encouraging her clients to fight back, helping them challenge flood insurance requirements where there are significant questions about the accuracy of flood maps and lender decisions. She tells them to hire an engineer who can measure the elevation levels of their homes. If properties are found to be above the floodwaters in a 100-year storm, the owners can submit a Letter of Map Amendment to the Federal Emergency Management Association and have their homes remapped outside flood zones. Then they aren't required to buy flood insurance.

Golon's advice proved fruitful for her client with the backyard brook. FEMA finally removed the couple's home from the flood zone, but the process took three months to complete.

This lifeline can keep home owners from falling into foreclosure or filing for bankruptcy to get out of their homes, which can lead to even worse problems for the state, says Vermont REALTORS® CEO Isaac Chavez. Fewer than 650,000 people live in Vermont, "so if that happens to 20 or 30 people, that’s equivalent to hundreds or thousands in a larger state," Chavez says.

The state's 1,600 REALTORS® have been dedicated to raising awareness about flood insurance among their congressional leaders, and the state association has partnered with NAR to lobby for revisions to insurance legislation. But regardless of those changes, Chavez says practitioners must get used to having hard conversations with clients about the challenges flood insurance poses to real estate markets.

"The main thing is to be completely honest and transparent up front, and don't try to soft-pedal what the issue is," Chavez says. "You'd rather lose a listing than wait until a seller gets buyers, and then the buyers freak out when they get their insurance quote. Then everybody loses."

Graham Wood
Executive Editor of Digital Media

Graham Wood is Executive Editor of Digital Media for REALTOR® Magazine. He can be reached at