Florida Flood Insurance

It is a foregone conclusion that flood damages will be of huge proportions from hurricane Irma. Although the most flood insurance is bought in the sunshine state, apparently only 40% or less are covered by flood insurance. Due to an increase in policy price voted by the congress in 2012 many have let their flood insurance lapse and lot more especially in the low-lying coastal areas who are most vulnerable have no flood insurance.

As per a CNBC report “A staggering swath of newly built South Florida homes lie in Irma’s path”,  “there are many more single-family homes and apartment towers crowded into the area than during devastating Hurricane Andrew in 1992.” The report further talks about the burgeoning construction boom in Miami-Dade, Broward and Palm-beach where 11,860 units are under construction east of I-95, according to Peter Zalewski, founder of cranespotters, a Florida real estate consulting firm. He further states these figures exclude development of thousands of rental tower units and development in the west.   The single-family housing units have seen a similar upsurge after Hurricane Andrews devastation. Remains to be seen how many of these new buildings built to a new building code can withstand the powerful punishment they are in for.  

This article covers the basics, provides useful links, more importantly gives information about federal aid and grants to help deal with the severe flooding. With a 30 day wait for new policy to kick in with very few exceptions those who do not have flood insurance have to take preventive measures to help secure their property and brace themselves hoping for minimal damages.

No Flood Insurance – what to do.

FEMA(Federal Emergency Management Agency) has a few grants to help people recover from severe disasters. $5000.00 is not much to go by but anything helps to recover from a disaster of this scale. There is no fee required to apply for disaster aid from FEMA, the US Small Business Administration which offers low interest disaster loans or the state. Check with the visiting FEMA/county officials for details.

Your local faith based community initiatives and other NGOs also should be tapped.

Important guidelines by FEMA to be followed after the event :

  • Beware of contractors who might scam you by posing as FEMA contractors. FEMA personnel carry identity. Do not give away money, personal information. Ignore any reports you might have heard that FEMA contractors are asking personal information or asking you to pay for debris removal.
  • Do not respond to phone calls seeking your personal information. Ask for ID and do not hesitate to hang up on cold-callers.
  • Contact government agencies using information posted on their website or in other official sources.
  • The only time you should provide personal information is during the initial application process for FEMA help or when you initiate contact with FEMA to follow up on an application. FEMA inspectors only require verification of identity.
  • Scam artists pose as government officials, aid workers, charitable organisations, or insurance employees.
  • Don’t sign anything you do not understand and contracts with blank spaces.
  • If you suspect fraud call the FEMA disaster Fraud hotline 866-720-5721 or contact Federal Trade Commission.
  • Take extensive pictures/videos of all the damage caused to your property. Please take adequate precautions to be safe when you do this.  
  • Minor repairs can be carried out on damaged property , and debris can be cleared.This does not disqualify you for federal disaster assistance.
  • Retain receipts so you can produce it to FEMA inspector.

Florida Flood Insurance –  Basics

Home owners insurance or renters insurance does not cover flood damage, which is why separate flood insurance policy has to be bought. Flooding can happen anywhere and more than 20% of the claims come from properties outside the high risk flood zone as per FEMA.

The sunshine state’s unique geography makes it prone to floods and pretty much the entire state falls under flood zone. Flood insurance is largely administered by NFIP(National Flood Insurance Program) and is run by FEMA. Basic NFIP flood insurance policy costs $450.00 which gives a coverage of $250.000 to the building, and $100.000 to the content inside a building. This policy costs the same no matter from whom you buy it.

FEMA is the federal agency which runs NFIP. Rates are set by FEMA. Talk to an insurance agent to buy this basic NFIP policy.  

To qualify for flood insurance a community must join NFIP and agree to enforce sound floodplain management standards. After this residents from the particular community are allowed to participate in and purchase flood insurance from NFIP.

Source: Florida Office of Insurance Regulation.

Do check with the community you live in to see if such a plan is in place and/or call an insurance agent to buy this policy since you cannot buy it directly from NFIP. You can also contact the NFIP referral call center at 1-800-427-4661.

Prepare a list of questions that should include the following before talking to an insurance agent.

  • Information about the community you live in is a NFIP participant
  • The flood zone you live in, and the property’s flood risk
  • Is flood insurance mandatory, and does the lender require it?
  • Do I qualify for a preferred risk policy?
  • Details of coverage as to what is covered and not covered.
  • Will the federal govt. Back my insurance policy?
  • How much coverage should I get for my building and its content?
  • What kind of deductibles are available, will paying higher bring down premium?
  • How can I reduce the cost of my flood insurance?
  • Are there additional expenses or agency fees?
  • Will my policy provide Replacement cash value or Actual Cash Value. What is the difference between the two?
  • Will I be required to produce an Elevation certificate?
  • Who should I call if I have a flood claim?
  • How do I pay for my policy?
  • How do I renew my policy?
  • Is there a waiting period, and are there exceptions which helps you get cover faster?

Source: FEMA website.

Important: Separate deductibles are applied for building and the contents inside. Some contents are automatically covered by the content deductible while others are not. Be sure to ask about this, and then consider adding other things which are not covered.

Private Florida Flood Insurance

Private companies also sell flood insurance but their rates can be more or less depending on a bunch of factors.  The Florida legislature passed SB 542 in May 2014. As per the website  of Florida office of Insurance regulation “the legislation enhances consumer choice and provides an alternative to NFIP. The bill provides private insurers to provide 3 different types of coverage apart from the standard coverage as offered by NFIP’s basic policy.

The  different coverages offered are:

  1. Standard Coverage: This covers only losses from the peril of flood as defined in the bill, which is the definition of basic policy offered by NFIP.  The policy must be the same as coverage offered from the NFIP regarding the definition of flood, coverage, deductibles, and loss adjustment.
  2.  Preferred Coverage: which includes the same coverage as standard flood        insurance and also must cover flood losses caused by water intrusion from outside the structure that are not otherwise covered under the definition of flood under the bill.
  3.  Customised Coverage: which is coverage that is  broader than standard flood coverage.
  4. Supplemental Coverage: which supplements an NFIP flood policy or a standard or preferred policy from a private market insurer. Supplemental coverage may provide coverage for jewellery, art, deductibles,and additional living expenses. It does not include excess flood coverage over other flood policies.

Source- flsenate.gov/committees/BillSummaries/2014/html/788

Additional details can be found by visiting the page.

We are on standby to help you deal with this difficult circumstance as best as we can. Please contact us so we can help you take the best decision and save money.

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