If you live in Florida and own a home, you may have heard that you should consider getting flood insurance. But what is it, and do you really need it? In this blog post, we’ll explore what it is, who needs it, and why it’s important for Floridians.
What is Flood Insurance?
Flooding is one of the most common and costly natural disasters in the United States. According to the Federal Emergency Management Agency (FEMA), floods cause an average of $8 billion in damages each year. And yet, only about 12% of American homes have it.
So, do you need flood coverage? If you’re wondering whether you should buy a policy, here are a few things to consider.
What Does Flood Insurance Cover?
A standard Homeowners insurance policy doesn’t cover flooding. So, if your home is flooded and you don’t have flood insurance, you’ll have to pay for repairs and replacement out of your own pocket.
Flood insurance covers structural damage to your home as well as damage to your personal belongings. It can also help with temporary living expenses if your home is uninhabitable after a flood. Some policies also cover water that seeps through the foundation or walls of your home, even if there’s no evidence of overflowing water on your property. This coverage is called “seepage.”
There are two types of policies you can purchase- an NFIP policy which is backed by the Federal Emergency Management Agency or a private policy. An NFIP policy covers up to $250,000 for the structure of your home and $100,000 for your belongings. A private policy will differ in coverage but typically offers more comprehensive protection.
How Much Does Flood Insurance Cost?
The cost of flood insurance varies depending on several factors such as the age and location of your home, whether your home is in a high-risk area, and the amount of coverage you need. The average annual premium for a standard homeowner’s policy is about $700, according to the Insurance Information Institute (III). But if you live in a high-risk area, you could be paying several thousand dollars a year for coverage.
Federal law requires lenders to escrow for insurance if your home is in a high-risk area and has a federally backed mortgage loan. If you have an older loan that isn’t federally backed, you may still be required to purchase flood by your lender even if you’re not in a high-risk area.
Who Needs Flood Insurance?
If you live in a high-risk flood zone, your mortgage lender will require you to have flood coverage. Even if you don’t live in a high-risk area, it’s still a good idea to get it.
That’s because floods can happen anywhere, and they often come without warning. In fact, 20% of all flooding claims come from properties outside of high-risk areas. And according to the National Flood Insurance Program (NFIP), just one inch of floodwater can cause up to $25,000 in damage to your home or business.
Why is Flood Insurance Important for Floridians?
Florida is one of the most hurricane-prone states in the country. That means there is a higher risk of flooding for Florida residents than for residents of other states. If you live in Florida and don’t have it, you could be on the hook for thousands of dollars in repairs if your home is damaged by a flood.
How Do I Get Flood Insurance?
There are two main ways to get coverage in Florida: through the National Flood Insurance Program (NFIP) or from a private insurer. The NFIP is a federal program that offers flood insurance to property owners and renters in participating communities. You can visit the NFIP website to find out if your community participates in the program. If it does, you can purchase an NFIP policy through any licensed property and casualty insurer that offers them.
Private insurers also offer flood coverage in Florida. These policies are typically called excess flood policies, and they cover everything that an NFIP policy covers—plus more. Excess flood policies usually have higher limits and lower deductibles than NFIP policies, so they may be a better option if you want more comprehensive coverage. You can purchase an excess flood policy from any licensed property and casualty insurer in Florida.
If you live in Florida and own a home, flood insurance is something you should seriously consider. Floods can happen anywhere, and they can cause extensive damage to your home and belongings. If you don’t have it and your home is damaged by a flood, you’ll be responsible for paying for all the repairs yourself. So don’t wait until it’s too late—get flood insurance for your Florida home today.
If you want to discuss options for flood insurance, please call us at 561-732-9305 our quoting hours are Monday through Friday from 8:30 AM to 5:00 PM. In addition, you can request a quote online. Please remember, We Handle All the Work, While You Save!
Rob Macoviak is the President of Oyer, Macoviak and Associates. Oyer, Macoviak and Associates is the oldest independent insurance agency in Boynton Beach and has been in business since 1953.