Known as the Sunshine State, Florida is known for its warm climate and beautiful coastlines. However, this very advantage can lead to disaster and destruction in certain parts of the year. Florida’s unique geography combined with its unpredictable weather patterns make it one of the most flood-prone states in the US. Given that, flood insurance is not just an optional add-on but a critical safeguard for homeowners.
In this guide, we’ll delve into why flood insurance Florida is vital for homeowners. Our team at F&N Insurance will explore its costs, factors affecting premiums, and its broader significance.
The Reality of Flood Risks in Florida
Floods affect more areas and homes in the US than any other type of event. In Florida, they’re not only a possibility but a yearly threat.
According to recent data, more than one-third of Florida properties are at significant risk of flooding in the next 30 years. It doesn’t matter if you’re in what’s categorized as a high-risk or low-risk area; the entire state is vulnerable to flooding. The worst part is that even just an inch of flood water can wreak havoc on homes and amount to costly damages that can reach around $25,000. While this number is just a figurehead, it puts into perspective the financial strain this natural disaster can cause, making it imperative to safeguard your Florida property.
What is Flood Insurance?
Many homeowners assume their home insurance policy covers damages caused by floods, however, standard home insurance policies don’t include this. You need to purchase a separate flood insurance policy to protect your home and belongings should you be affected by rising waters.
Flood insurance policies are available in three forms: Dwelling (for most homes), General Property (apartment buildings and businesses), and Residential Condominium Building Association (condominiums). These can often be obtained from the National Flood Insurance Program (NFIP) or through private insurers.
Flood Insurance vs Hurricane Insurance
Hurricane insurance is not just one insurance policy. It refers to a combination of policies including home insurance, flood insurance, and, in some areas, windstorm insurance. Typically, homeowners insurance covers some forms of hurricane damage, however, for flood damage, you’re required to purchase a separate flood insurance policy.
A hurricane insurance is typically applied to damages incurred from destructive winds and torrential rain. Meanwhile, flood insurance is applicable to damage from rising waters.
- Hurricane insurance covers:
- Siding damage from a storm
- Roof damage caused by high winds
- Shattered windows from flying debris
- Flood insurance covers:
- Possessions ruined by water entering your home
- Damage from rising water levels seeping into your home
- Damage from storm surge flooding your property
Storm Surge and Flood Insurance
A storm surge is the abnormal rise of seawater above average or predicted levels, which is then pushed ashore by powerful hurricane or storm winds. This is often the primary culprit behind floods in coastal areas and can cause a rapid rise in water levels in low-lying areas beyond the direct coastline.
Fortunately, most flood insurance policies, whether that’s from the NFIP or private insurance providers, cover damage caused by storm surges. However, take note that these policies only cover water damage. Those incurred from high winds fall under your homeowners insurance policy.
Flood Insurance Florida Coverage Details
Flood insurance is typically divided into two categories: Building coverage and Contents coverage.
Building Coverage
This coverage type covers flood damages to the structure of your home. It pays for things including:
- Foundation walls
- Built-in appliances and cabinets
- Staircases
- Solar energy equipment
- Electric and plumbing systems
- Furnaces
- Water heaters
- Permanently installed carpets
- Detached garages
- Fuel and well water tanks
Contents Coverage
Similar to personal property coverage, contents coverage pays for damages incurred on your belongings. This can include:
- Clothing
- Electronics
- Furniture
- Washers, dryers, and microwaves
- Original artwork
- Portable air conditioners
The NFIP offers a maximum of $ 250,000 for building coverage and $ 100,000 for contents coverage. For higher property values, you can purchase flood insurance from a private flood insurer. This can either supplement your NFIP insurance or completely replace it.
Important Coverage Considerations
- Deductibles: The deductible is the amount you have to pay before the insurance kicks in. By choosing a higher deductible, you agree to pay a higher amount out of pocket when you file a claim, but this translates to lower insurance premiums.
- Coverage Limits: Make sure to understand the limits of how much your flood policy will pay out for both building and contents coverage.
- Replacement Cost vs Actual Cash Value: Replacement cost pays out for the price of similar new items, while actual cash value factors in the depreciation of the damaged items.
What Does Flood Insurance Not Cover?
When you purchase a flood insurance policy, the following exclusions might apply:
- Motor vehicles
- Damage from sewer line back-ups or to your sump pump
- Damage to outdoor structures (landscaping, pool, decks)
- Stock certificates
- Damages caused by negligence (such as not addressing maintenance issues)
- Living expenses if you have to relocate
Average Premiums for Flood Coverage in Florida
Based on data from Quadrant Information Services, the average cost of flood insurance in Florida is $958 per year. However, for homeowners with properties in high-risk areas, premiums can reach as high as $2000 or more annually.
Factors Affecting Premium Costs of Florida Flood Coverage
In Florida, flood insurance premium costs are heavily impacted by several factors that contribute to the overall risk and potential damage from flooding your property. This includes the following:
- Location: Homes closer to the coast or in low-lying areas such as those in Tampa and Miami generally face a higher risk of flooding and thus may have higher premiums.
- Flood Zone Designation: Florida is divided into different flood zones based on historical data and flood risk. Those in Zone X which has low to moderate flood risk have lower premiums while those in Zone VE, coastal areas with additional hazards such as storm waves, face the highest premium costs.
- Elevation: Homes elevated above expected flood levels can generally expect lower risks and lower premiums.
- Policy Deductibles: As mentioned above, paying higher deductibles will significantly lower your insurance cost. However, it’s important to balance your ability to pay with the insurance cost you’re willing to pay.
- Building Structure and Coverage Needs: The type of construction of your home, the materials used, and its age will affect your premium costs. The level of coverage you choose will also affect it.
Determining If You Need Flood Insurance in Florida
While Florida homeowners are generally encouraged to get flood insurance given the state’s unique geographical position, many are still unsure if it is worth the additional cost. If you’re still on the fence, here’s a straightforward checklist to help you determine if flood insurance is necessary for your situation.
- Check Your Home’s Flood Zone
Either refer to FEMA’s flood zone map or ask the help of an insurance agent to determine which flood zone you’re located in. If your home is in flood zones A, AE, and VE, you’ll likely need flood insurance, especially if you have a mortgage.
- Mortgage Requirements
If your home is located in a high-risk flood zone and financed through a federally regulated lender or insured lender, you are federally required to avail of flood insurance.
- History of Flooding
Even if your home is not in a high-risk zone, investigate the historical flood date of your area. Past flooding can be indicative of future risks.
- Property Elevation and Building Characteristics: If your property sits at a higher elevation or has been constructed out of flood-resistant materials, you have a lesser need for extensive coverage. However, insurance is still recommended.
- Financial Considerations: Consider whether you can afford the cost of repairs or rebuild without assistance if your home is flooded. This can affect your decision to avail of flood insurance.
How to File a Flood Insurance Claim
Before filing an insurance claim, determine if the cost of damages is minimal and can be paid out of pocket to avoid potential rate hikes after filing a claim. If you have to file a claim, you can follow these steps:
- Contact your insurance provider as soon as possible and provide your policy information and relevant information about the damage. The sooner this is done, the better because most insurance claims take at least 30 days before they kick in.
- Take photographs and video evidence of the damages. This documentation is essential in filing your claims and getting an accurate reimbursement.
- Begin cleaning up and remember to keep any receipts in regard to mitigation efforts. Your insurance provider may also offer reimbursement for these minor repair expenses.
- An adjuster will visit your property to assess the damage for your insurance provider. Provide them with all the documentation they need and be present in the inspection for any queries they might have.
- You can review the results of the inspection and request a reinspection if you don’t agree with the findings.
- After your claim is filed and processed, you will receive a payment to cover the inclusions outlined in your policy. But have patience as the entire process can take time.
The Bottomline
Given the high-risk of flooding in Florida, ensuring that your property and valuables are protected is paramount. Not only will this help you avoid devastating financial loss because an event you have little control over, but it will also give you peace of mind.
Protect the property and the valuables you have spent years working toward with a comprehensive and tailored flood insurance Florida plan from F&N Insurance. Our agents will be happy to guide you throughout the entire process and answer any questions or doubts you may have. Don’t wait until it’s too late. Protect your home now!
Contact us today and get an instant quote!