Connecticut’s proposed flood disclosure law: What insurance producers need to know

To increase transparency around flood risk and encourage climate resilience, Connecticut lawmakers have introduced S.B.1245—An Act Establishing a Resilient Connecticut Strategy. If passed, this bill would bring significant changes to how flood insurance is disclosed to consumers and the role insurance producers play in that process.

Proposed mandatory flood insurance disclosures for homeowners policies

One of the most notable provisions of the bill would require insurance producers and surplus-lines brokers to provide a written flood insurance disclosure to applicants for personal risk insurance policies. If enacted—starting July 1, 2026—when a consumer applies for a homeowners or property insurance policy—excluding auto coverage—the insurance producer would need to inform the client in writing that flood insurance is not included in the standard policy. This disclosure would also explain that coverage is available through the National Flood Insurance Program or from private insurers.

To ensure that consumers acknowledge this information, the producer would be required to obtain a signed statement from the applicant confirming receipt of the disclosure. If the applicant declined flood coverage, that decision also would need to be documented in writing. Additionally, insurers would be required to include a bold, capitalized notice on the declarations page of every homeowners policy stating: FLOOD COVERAGE IS NOT PROVIDED UNDER THIS INSURANCE POLICY.

These changes reflect a growing recognition that many homeowners mistakenly believe their standard policies cover flood damage. By making these disclosures mandatory, Connecticut lawmakers are attempting to ensure that homeowners are fully aware of their flood risk before finalizing their insurance decisions.

Proposed disclosure requirements for mortgage lenders

Beyond the role of insurance producers, the bill also would impose new flood disclosure requirements on mortgage lenders. Before closing on a mortgage, lenders would be required to provide borrowers with a written notice stating that standard homeowners insurance does not cover flood damage, that flooding can occur outside of designated flood zones and that borrowers may wish to consult an insurance producer about flood insurance options.

As proposed, this notice would need to be signed and dated by the borrower, with lenders keeping copies in their records. This additional layer of flood risk disclosure could result in increased consumer inquiries about flood insurance, as homebuyers would be explicitly advised to seek coverage.

Potential disclosure requirements in real estate transactions

The bill also proposes making flood risk disclosure a mandatory part of real estate transactions. If enacted, beginning July 1, 2026, sellers of residential properties would be required to provide a flood disclosure notice to prospective buyers, in addition to the standard residential condition report. This notice would include detailed information about the property’s flood history and risk, including:

• Whether the home is in a Federal Emergency Management Agency—designated floodplain or a moderate-risk flood zone.
• Whether flood insurance is required under federal law.
• Any flood claims filed on the property.
• Whether FEMA disaster assistance has been received for flood damage.
• Whether the property has a FEMA elevation certificate.

If sellers fail to provide this disclosure, they would be required to credit the buyer $500 at closing.

Proposal to compel landlords to disclose tenants’ flood risks

Another significant provision of the bill would impact the rental market. If passed—starting July 1, 2026—landlords would be required to provide renters with a flood disclosure notice before signing or renewing a lease. This notice would indicate whether the rental property is in a FEMA floodplain, whether it has experienced flooding before, and whether flood insurance is in place.

Additionally, all residential leases would be required to include a standardized statement informing tenants that renters insurance does not typically cover flood damage, and that flood insurance may be available through the NFIP.

This requirement could lead to more renters seeking flood coverage, presenting a potential market opportunity for insurance producers who offer contents-only flood policies.

Potential restrictions on construction in high-risk flood areas

Beyond disclosure requirements, the bill also proposes measures to limit new developments in flood-prone areas. If enacted—starting Monday, Dec. 1, 2025—state funds would no longer be available to subsidize new residential construction in floodways, high-risk coastal zones, or FEMA-defined areas with moderate wave action; nor reconstruction projects that increase a home’s finished living space in these flood-prone areas—unless the purpose is to bring the structure into FEMA compliance.

This restriction reflects the state’s shift toward climate-resilient development and discourages homeowners from rebuilding in areas prone to repeated flooding.

What this means for insurance producers

For insurance agents and brokers, these proposed regulations create both challenges and opportunities.

On one hand, the mandatory disclosure requirements would mean that producers need to be diligent in providing and documenting flood insurance information. If the bill passes, failure to comply could lead to regulatory scrutiny and potential penalties.

On the other hand, these changes are likely to drive higher consumer awareness of flood risk, increasing demand for flood insurance. Homebuyers would be formally advised by lenders and sellers about flood risks, while tenants would see similar disclosures from landlords. This could lead to more inquiries about flood policies, particularly from customers who might not have otherwise considered flood insurance.

PIACT working to protect you

PIACT has been engaged in discussions surrounding this proposed legislation. While the association supports efforts to improve consumer education about flood insurance, it has expressed opposition to provisions that would require insurance producers to provide written disclosures and obtain client signoffs. PIACT has raised concerns that such requirements could create new errors-and-omissions liabilities for producers—potentially exposing them to legal risks.

The association plans to work with the bill’s sponsors to ensure that consumers receive the necessary information about flood coverage without placing undue burdens on insurance professionals.

By advocating for a balanced approach, PIACT strives to protect both policyholders and producers while supporting the broader goal of improving flood insurance awareness.