House Insurance Committee forwards bill requiring sellers to disclose flood risks to buyers

At a committee meeting, the House Insurance Committee reported House Bill 17O4, a measure that would require home sellers to disclose a property's flood-related risk factors to potential buyers, whether the owner carries flood insurance or has filed a flood claim, and notify buyers that a typical homeowner's insurance policy does not usually cover flood damage.

The disclosure requirements are part of recommendations from the Flood Insurance Premium Assistance Task Force and would also direct the state insurance department to maintain a public website with information about flooding and flood insurance. "House bill 17 o 4 requires home sellers to disclose a property's flood related risk factors to home buyers," said Joe Keller, a staff member who explained the bill to the committee. "The bill also requires the insurance department to maintain a website regarding flooding and flood insurance. Finally, home sellers must also provide a disclosure informing buyers that a normal homeowner's insurance policy does not typically cover flood damage."

Why it matters: Supporters said buyers often discover flood risk only after a claim is denied. Representative Zimmerman, who served on the task force that recommended the change, said the bill grows from that work and would give buyers more information during the real estate transaction. "I believe this bill is reasonable and will provide greater transparency in the home buying process," Representative Zimmerman said.

Committee discussion focused on the scope of required disclosures and on practical questions about what counts as a qualifying flood event. Representative Fritz asked whether damage caused by a nonfunctioning French drain or faulty gutters would require disclosure. Keller responded, "Under the bill, a property seller would only need to disclose flooding that's due to a natural flood event that affects more than 2 properties," clarifying that isolated plumbing or drainage failures tied to a single house would not trigger the statutory disclosure.

The sponsor said members of the task force and outside stakeholders worked to craft amendment language before the bill reached the committee. The sponsor described the measure as implementing recommendation No. 2 of the task force report and said stakeholders would be circulated amendment language ahead of floor consideration.

Formal action: The committee chair called for negative votes; none were voiced. "House Bill 17O4 is reported from the House Insurance Committee unanimously," the chair announced, sending the bill to the full House for further consideration.

Next steps: Committee members said they expect to circulate agreed amendment language to stakeholders before the bill reaches the floor. The transcript provided no roll-call tally or names of individual yes votes.

(Reporting based on remarks at a House Insurance Committee meeting in which Joe Keller, Representative Zimmerman and Representative Fritz spoke. The committee action recorded in the transcript was that the bill was reported unanimously; no roll-call vote was recorded in the transcript.)