What does the Flood Insurance Coverage Subject to Change Disclosure indicate?

The Flood Insurance Coverage Subject to Change Disclosure is intended to inform property owners of the potential changes in their flood insurance obligations, particularly in the context of zoning changes. This is significant because if a property is rezoned—such as moving from a low-risk area to a high-risk flood zone—owners may be required to obtain or adjust their flood insurance in accordance with new regulations. This disclosure is crucial for ensuring that property owners are aware of how rezoning can impact their insurance requirements, thus facilitating informed decision-making about their coverage.

Understanding this context is vital for real estate and loan signing professionals, as they must guide clients through the implications of flood insurance in relation to property zoning and potential financial liabilities. The other options, while relevant to aspects of flood insurance, do not specifically address the core function of the disclosure in relation to zoning changes and associated obligations.