11 May Florida Flood Insurance
The entire state of Florida is considered to be at risk for significant flooding (some areas more so than others, of course). With this information, it would seem like purchasing Florida flood insurance policies should be a priority for property owners in Florida, though the numbers do not necessarily reflect this. As of 2010, the National Flood Insurance Plan (NFIP) statistics showed that two million homes and businesses in Florida were covered by an insurance policy. While this is a large number that reflects the preparedness of a number of Floridians, this represents only about twenty percent of the total number of properties that could be insured.
Florida is no stranger to damaging floods. In one ten year period, five federal disasters were declared in the state, all as a result of flooding. Heavy rains associated with hurricanes, tropical storms, or even simple thunderstorms are one prominent cause of flooding in Florida, along with storm surge from tropical storms or hurricanes. Mere inches of rain or storm surge would be enough to flood a home or business, yet these storms that affect Floridians can and will deposit upwards of ten inches of rain and produce storm surge that is upwards of ten feet. The physical damage caused by these storms is significant, and costs associated with each event can easily reach hundreds of millions of dollars.
Property owners in Florida may have already heard of the NFIP. This is the federal program that offers subsidized flood insurance policies to home and business owners across the country. Floridians purchase policies from the NFIP through insurance agencies that partner with the NFIP. The Federal Emergency Management Agency (FEMA) creates flood maps for the entire state and sets policy rates according to the risk for a particular zone. While the rates may vary from zone to zone, the rate for any given zone will always be one set price. What this means for property owners is that they are not able to shop for better prices between insurance agencies if they choose a plan from NFIP. The only way a property owner could obtain a better premium than the standard rate for their zone would be if they completed modifications to their home or business that would make it less susceptible to damage from flooding.
The other option property owners have for Florida flood insurance is through the new and still growing private insurance market. In March 2014, Florida legislators passed a measure that would allow private companies to begin offering their Florida flood insurance policies to property owners in the state. There are only a small number of private companies offering these Florida flood insurance policies in the state, but many potential customers may find that seeking out these companies is well worth the effort. Whereas the NFIP offers standard policies at a standard rate, the private insurance companies could offer a policy that is more comprehensive at a lower rate.
While Florida is known as the “Sunshine State,” wise property owners in the state should research and then purchase an insurance policy that will protect their assets, in preparation for the days when rain and floods block out the sunshine.
All information is general in nature and is intended to provide guidance only. It is up to you to request specific coverage options, the agency and agent do not bear this responsibility. Always read the policy if there is a questions about coverage or a claim. If any information herein should conflict with your actual policy’s specific language, the policy language will be controlling.
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