Two Different Things Happened, at Two Different Times
I've had a few clients ask me about this lately, so let me clear it up, because there's some confusion out there.
There isn't one new flood law that just dropped. There are two separate pieces, and they happened on different timelines. Public Act 25-33 added a Flood Risk Awareness section to Connecticut's Residential Property Condition Report - that's the disclosure form every seller fills out. That part has quietly been in effect since mid-2025. Sellers have been answering flood questions on that form for a while now and most people never noticed.
So what's actually fresh, as of July 1, 2026, is the lender and insurer side. Mortgage lenders now have to hand buyers a written flood notice at least 10 days before closing. And insurance companies have to print a flood-exclusion notice directly on homeowners and renters policies. That's the September-relevant news. That's the part most people haven't heard yet.
Worth knowing: If you're selling right now, you've probably already dealt with the disclosure form changes without realizing it. The lender and insurer requirements are what's new for anyone closing this fall.
Basically, the Flood Risk Awareness section asks two main things. The most important one: has the property ever received FEMA or SBA disaster assistance for flood damage. The second: has there been past water penetration - basement flooding, water coming in through walls or foundation, that kind of thing.
Most sellers answer these honestly without thinking twice, because most sellers haven't had flood issues. But if your house has had water in the basement after a bad storm, or you got any kind of federal disaster assistance years ago, that goes on the form. Buyers will see it before they sign a purchase agreement.
This isn't a gotcha. It's the same spirit as the rest of the condition report - roof, furnace, well, septic, and so on and so on. Flood history is just one more line item sellers have to be straight about. And if that section - or the whole report - doesn't get provided before the buyer signs, the seller owes the buyer a $500 credit at closing. That penalty has been on the books for years. It's not new.
Why the Lender and Insurer Pieces Matter More Than People Think
Here's the thing most people don't realize: standard homeowners insurance does not cover flood damage. Never has. A lot of buyers assume it does until they're staring at a claim denial.
Starting July 1, 2026, lenders have to put that in writing, at least 10 days before your closing. Insurers now have to print a plain-language notice right on new and renewal policies saying flood losses aren't covered and separate flood insurance is available.
Connecticut Insurance Commissioner Andrew Mais has said nearly half of all flood damage in the state happens outside FEMA-designated flood zones. Let me put it this way - the map that says you're not in a flood zone doesn't mean your basement can't flood. It just means you probably don't have flood insurance, because nobody made you get it. I'd rather a client in Stratford or Milford - both towns with real exposure along the coast and rivers - check their actual risk before closing than find out the hard way after the first bad nor'easter.
~50%of CT flood damage occurs outside designated flood zones
Check Your Own Risk Before You're Surprised at the Table
Connecticut launched a free Climate Risk Mapping Tool through the Insurance Department, built with First Street. You put in your address and it shows flood, wildfire, wind, and heat risk specific to that property.
I tell my clients this straight up: use it before you list, and definitely use it before you go under contract on something. It takes a few minutes. If you're selling, you'll know exactly what you're dealing with before a buyer's lender notice or insurance quote tells you. If you're buying, you'll know before you're locked into a mortgage on a house sitting somewhere First Street thinks is high risk, even if FEMA's map says otherwise.
Zillow's estimate is not the answer here, and neither is assuming your town's flood map is current. This is one of the better free resources the state has put out. Use it as a starting point, then talk to your agent and your insurer about what it actually means for your specific property.
That $500 Credit Isn't New, and It's Not Flood-Specific
I've seen some confusion online suggesting there's a new $500 penalty tied specifically to flood disclosure. That's not accurate. Connecticut has had a $500 buyer credit for years under existing law - if a seller doesn't provide the Residential Property Condition Report at all before the buyer signs a purchase agreement, the buyer gets a $500 credit at closing.
That penalty applies to the whole report being missing, not to a seller leaving the flood section blank or answering it in a way a buyer doesn't like. Basically, it's a general enforcement mechanism that's been on the books for a long time. The flood section just got added to the form the penalty already applied to.
Long story short: don't skip the disclosure report, flood section or otherwise. But don't panic thinking there's some brand-new flood-specific fine either. That's just not how the law reads.
Bottom line: The seller form has been asking about flood history since mid-2025. What's new this year is that your lender and your insurer now have to tell you, in writing, that standard coverage doesn't include flood. Check your risk before you sit down at the closing table, not after.
Frequently Asked Questions
Do I have to fill out the flood section if my house has never flooded?
Yes. Every seller completes the Residential Property Condition Report, including the Flood Risk Awareness section, regardless of history. If there's no history, you simply answer no - it still has to be filled out.
Does this mean I need flood insurance now?
Not automatically. It means lenders and insurers have to tell you clearly that standard coverage doesn't include flood damage, so you can decide whether to buy a separate flood policy based on your actual risk.
Is my house in a flood zone if my insurer sends me this new notice?
No. Every homeowners and renters policy in Connecticut now carries this notice as of July 1, 2026, regardless of location. It's a disclosure requirement, not an indicator that your specific property is at risk.
Where do I check my property's actual flood risk in Connecticut?
Use the state's free Climate Risk Mapping Tool, built with the Insurance Department and First Street. Enter your address and it shows flood, wildfire, wind, and heat risk specific to that property.
Can a buyer back out if they find flood history on the disclosure form?
A buyer isn't automatically entitled to walk away just because flood history is disclosed, but it becomes part of their decision-making and can factor into inspection contingencies or negotiations. Talk to your agent about how to handle it on either side of the deal.