Oregon lawmakers could vote to advance a bill Monday that would make it easier for home buyers to figure out whether they’ll need to buy flood insurance. The House Business and Labor Committee will consider the measure.
Flood insurance can add more than a thousand dollars a year to the cost of owning a home. But it’s not always obvious up front whether a mortgage lender will require it. The bill would require sellers to answer a simple yes or no question: “Have you ever purchased flood insurance for the property?”
The measure’s sponsor is Rep. Jeff Reardon, D-Happy Valley. He says it’s meant to give home buyers the information they need before they’re too far along in the process to back out. “What this bill is trying to do is, just notify somebody before they make the purchase of their home that hey, you’re going to be subject to this floodplain insurance,” said Reardon during a February 11 hearing on the bill.
Home sellers already have to answer a question about whether the property is in a floodplain. But under current Oregon law, they’re allowed to simply answer that they don’t know.
The measure would not guarantee that a potential buyer would know if flood insurance is required. Rep. Brian Clem, D-Salem, said he paid cash for a house that's in a flood zone in Salem. Since he never had a mortgage on the property, he never had to satisfy a lender's requirement for flood insurance. Clem said during the February hearing that the need for flood insurance should be obvious to anyone who visits the property, which is adjacent to a waterway. But Clem said if he sells it, he could truthfully answer that he had never purchased flood insurance.