I Used to Skim Past the Flood Zone on Northern Michigan Listings, and Then April Happened

The National Flood Insurance Program's authorization runs out at 11:59 p.m. on September 30. That is nineteen days from today. Congress has passed a stack of short-term extensions over the last several years and the safe bet is that they do it again, but I've stopped telling people it's automatic.

If the program lapses, FEMA stops writing new policies. Policies already in force keep running to the end of their one-year term, so nobody's coverage evaporates on October 1. The problem is anyone closing on a house where the lender requires flood insurance and there's no policy in place yet. The National Association of Realtors puts the national exposure at roughly 1,300 sales a day, about 40,000 closings a month. Most of those are not in Michigan. Some of them are.

A year ago I would have filed all of this under "downstate problem."

What April did

We had a historic March snowfall, it went into the rivers more or less at once, and by April 10 the state had the emergency operations center running over rising water at the Cheboygan Lock and Dam. Then a run of storms between April 13 and April 18 put rain on top of the melt. The National Weather Service issued 13 flash flood warnings, 24 flood warnings and 25 flood advisories across Michigan in the month of April. Roads washed out, a few dams got watched closely for overtopping, and several hundred people around the state were displaced or stranded.

On April 15 the governor's state of emergency expanded to include Antrim, Benzie, Grand Traverse, Kalkaska and Leelanau. The federal major disaster declaration came through on July 2, and FEMA Individual Assistance went to 27 counties. Four of the counties we work in are on that list: Antrim, Benzie, Grand Traverse and Kalkaska.

Leelanau is not. It was in the April state of emergency and then didn't land on either federal list, Individual or Public Assistance. I don't have a real explanation for that past the damage assessment numbers not clearing a threshold, and I'd be careful reading it as evidence that Leelanau doesn't flood.

What the flood map is for

This is the part that trips people up, agents included.

The FEMA map, the FIRM, decides whether your lender has to make you carry flood insurance. Structure sitting in a Special Flood Hazard Area with a federally backed loan, you're buying a policy. Structure in Zone X, the lender doesn't have to require anything.

What the map no longer does is set your premium. FEMA moved to Risk Rating 2.0 a few years back and the flood zone dropped out of the pricing formula. Premiums now run on distance to water, the kind of flooding, foundation type, how high the lowest floor sits, claim history, replacement cost. Two houses on the same road in the same zone can price very differently, and a Zone X house forty feet from a creek is not automatically cheap to cover.

So "we're not in a flood zone" is an answer to the lender's question and not to yours. FEMA's own claim data says nearly a third of NFIP claims over the last decade came from properties outside the high-risk areas.

About 770 Michigan communities have no map at all

Michigan has roughly 1,776 communities. About 1,004 of them have FEMA floodplain maps. The rest were never studied.

You can guess which ones. Small rural townships with a few hundred residents and a lot of creeks, which describes a great deal of the Northern Michigan ground people buy. If nobody ever modeled the stream behind the property, the property is not in a flood zone, and I think plenty of buyers hear "unmapped" and file it as good news.

Most of our real flood risk comes off rivers rather than the big water anyway. The Boardman through Traverse City, the Betsie down through Frankfort, the Platte, the Elk, the Jordan. We wrote about the Boardman after it took out a bridge and the pattern hasn't changed: water comes down fast in spring, the culverts can't take it, and the road goes before the house does.

Things worth doing before you close

Your homeowners policy does not cover flood. No standard policy in the country does, and it is still the single most common surprise I run into on this subject.

A new NFIP policy carries a 30-day waiting period. The exception is when a lender requires the coverage as part of a loan closing, in which case it takes effect at funding as long as the application and premium are in by the closing date. If you're buying a policy voluntarily because you looked at the creek and thought better of it, start a month early.

Since 2019, lenders have been required to accept a qualifying private flood policy in place of NFIP coverage. The private market up here isn't deep, but if Congress does let the program lapse on the 30th, that's the door that stays open. Ask your lender what they'll accept, and do it this week rather than the week of closing.

Pull the actual FIRM instead of the flood summary a listing portal spits out. The FEMA Flood Map Service Center is free and an address takes about four minutes.

Then ask the neighbors. Somebody on that road has been there thirty years and can tell you which spring the water came up over the two-track and how long it stayed. That's better information than anything I can pull off a screen.

Two things I don't know

One is whether Congress reauthorizes the program by the 30th, and I'd be guessing if I told you either way. The other is what FEMA's Great Lakes coastal study does to the shoreline lines around Grand Traverse Bay when it lands. Coastal maps get redrawn, and redrawn maps move houses into the mandatory-purchase zone that weren't in it the year before. If you're buying bay frontage this fall, put that question to an insurance agent before your inspection contingency runs, not after.

None of this is a reason to walk away from anything. Most of what shows up in our current listings has no meaningful flood exposure and never will. But "not in a flood zone" got used as shorthand for "no flood question" for a long time up here, and after this spring that shorthand looks thin.

If you're under contract right now and flood insurance is anywhere in the file, call your lender this week. And if you want a second set of eyes on whether a particular parcel has a water problem or just a nervous buyer, that's a call I'm glad to take.

Taylor Brown, Realtor
Taylor@taylorbrownrealtor.com