Do I need flood insurance?
This is a question we commonly hear. Considering we are living in Florida, there answer is yes! You need flood insurance for a number of reasons. First, if you own property, it is a good way to protect your biggest investment. It just makes good financial sense to insure your home and personal property. Many people are shocked when they learn that usually flood damage is not covered by homeowners’ insurance. It is important to not make assumptions, read your policy exclusions carefully, and purchase flood insurance. The cost of flood insurance is low compared to the cost of repair and replacement after an event.
Secondly, flooding due to hurricanes, storms and heavy rain, is common in here in Florida. In fact, flooding is one of the most common natural disasters in this state. As catastrophic weather events become more and more common, many areas that had never seen significant water previously were completely destroyed by recent hurricanes. A standard home insurance policy is not going to cover the losses resulting from a flood. It’s important that you do not confuse flood insurance with water back-up and pump failure coverage in a standard home policy. These are usually caused by water backing up into the house through pipes and drains. According to Florida Disaster.Org, “there are different reasons a community may flood; storm surge, river flooding, or heavy rainfall. Low-lying or poorly drained areas can also increase a community's flood risk.”
Last, and not least, having flood insurance also gives you peace of mind. Knowing if you live in a flood zone allows you to prepare before, during, and after a flooding event. Before an event, knowing your elevation helps determine how floodwater may affect your home and property, and allow you to develop an emergency action/evacuation plan. During a flood event knowing your neighborhood and community will assist you in determining what areas to avoid, and what roadways are more likely to be unpassable. After the flood, it provides you with information regarding making a claim, handling challenges and damages, and a dedicated agent that will guide you through the process.
When is the best time to purchase flood insurance?
You can purchase flood insurance at any time, but it is not a good idea to do so when a storm is approaching or during the hurricane season. Many companies require the 30 days after the purchase date for the policy to take effect.
How does my flood zone effect my flood insurance premium?
The flood zone where your home is located will impact your insurance premium. There are four moderate risk flood zones according to the national flood insurance program. They are A, B, C and X. “A” rated flood zones are considered high risk and carry the most expensive premiums. Flood zones B, C, and X, however, are considered low to moderate risk and the premiums are much lower relative to zone “A”.
According to FloodSmart.gov, the average premium for $250,000 in building coverage and $100,000 in personal property in a lower risk flood zone is $405 a year. Please be aware that most financial institutions will mandate a flood insurance policy for all homes located in “A” rated flood zones.
High-risk flood areas begin with the letters A or V on FEMA flood maps and carry a larger premium. For example, in 2023 our office received a $10,000 premium for a beachside property designated as a VE flood zone.
What is the National Flood Insurance Program?
The National Flood Insurance Program is a pre-disaster flood mitigation and insurance protection program designed to address the cost of disasters. The National Flood Insurance Program makes federally backed flood insurance available to residents and business owners. Standard flood insurance by the National Flood Insurance Program generally covers physical damages directly caused by flooding within the limits of the coverage purchased. Private providers may have higher limits or broader coverage compared to National Flood Insurance Program policies.
Regardless of which policy you select for your business or family, any coverage is better than none. If your property experiences flooding impacts from a disaster, it is not guaranteed you will be able to receive federal assistance. If your area has not received a Presidential Disaster Declaration, you will not receive assistance. A Presidential Disaster Declaration makes federal assistance available under FEMA. If your area does receive a Presidential Disaster Declaration, the average payout by FEMA’s Individuals and Households Program is only about $5,100 in Florida. With the National Flood Insurance Program, claim payments average around $29,000. (https://www.floridadisaster.org/planprepare/flood-insurance/)
What is covered and what is not covered by flood insurance?
According to FloridaFloodInsurance.org, flood insurance covers physical damage to your property and possessions (up to a certain limit depending on your policy).
Building Property included (inside the home):
• The insured building and its foundation
• Electrical and plumbing systems
• Central air-conditioning equipment, furnaces, and water heaters
• Refrigerators, cooking stoves, and built-in appliances such as dishwashers
• Permanently installed carpeting over unfinished flooring
• Permanently installed paneling, wallboard, bookcases, and cabinets
• Window blinds
• Detached garages (up to 10 percent of building property coverage; other than garages, detached buildings require a separate building property policy)
• Debris removal
Personal Contents Property include (inside the home):
• Personal belongings, such as clothing, furniture, and electronic equipment
• Portable and window air-conditioners
• Portable microwave ovens and portable dishwashers
• Carpets that are not included in building coverage
• Clothing washers and dryers
• Food freezers and the food in them
• Certain valuable items such as original artwork and furs (up to $2,500)
What is not covered?
• Living expenses, such as temporary housing (unless written through a private carrier or carry excess flood insurance)
• Property and belongings outside of an insured building, such as trees, plants, wells, septic systems, walks, decks, patios, fences, seawalls, hot tubs, and swimming pools
• Damage caused by moisture, mildew, or mold that could have been avoided by the property owner
• Currency, precious metals, and valuable papers such as stock certificates
• Financial losses caused by business interruption or loss of use of insured property
• Most self-propelled vehicles, such as cars, including their parts