Which properties are mandated to have flood insurance?

Properties that are financed by federally-backed loans and located in a flood zone are required to have flood insurance due to the financial risk associated with flooding in these areas. This requirement aims to protect both lenders and borrowers by ensuring that properties in high-risk flood zones have insurance coverage to mitigate financial losses in the event of flooding.

Properties that are in designated flood zones but are not financed through federally-backed loans, as well as seasonal properties, do not have a universal mandate for flood insurance. These properties may still voluntarily obtain insurance, but it is not a requirement imposed by federal regulations as it is for those properties with federally-backed financing. This distinction emphasizes the role of federal agencies in promoting risk management and financial security for properties that fall within specific risk classifications.