What You Should Know About Flood Insurance

Floods post a strong risk across the U.S. coastline, and Florida’s beautiful beachfront is particularly vulnerable. The Sunshine has an incredible 1300 miles of coastline – perfect for fun, sun and of course, floods. With a large and growing population in Florida, many coastal homes are at highest risk, however with a low elevation of just 6 feet, nearly every home in Florida is at risk for flooding. 

So, what is a homeowner to do? Is flood insurance a good idea? Well, one issue is that many homeowners believe that flood coverage is automatically included in homeowners insurance. In fact, it is not! Another misconception is that if you live in a low flood risk zone you may not need additional flood insurance coverage. That is also incorrect. Over 20% or more of flood claims every year come from “low risk” areas, and considering Florida is prone to severe storms and hurricanes, you’ll want to consider additional coverage in most cases. 

How Can I Obtain Flood Insurance?

The first step is to contact an insurance agent and go over your homeowners insurance policy, as well as flood insurance options. In general, flood insurance is available through the National Flood Insurance Program (NFIP), which is administered by the Flood Emergency Management Agency (FEMA).

What Will Flood Insurance Cover? 

Standard flood insurance (under the standard NFIP policy) will provide replacement cost coverage capped at $250,000 for damage to the structure of the home and actual cash value coverage capped at $100,000 for loss of personal possessions. Keep in mind, flood insurance will not cover water related damage from other causes (such as leakage / seepage claims), or damage caused by wind driven rain. 

What Are Some Concerns with Flood Insurance?

In Florida, there is something called the “Florida Matching Law”. This law essentially says that if you have any damage in your home, the insurance company will cover the costs of matching damage. For example, if there was any damage in your kitchen and your cabinets were damaged, the “Matching Law” goes into effect and the insurance will need to replace ALL of your cabinets (top and bottom) because you may not be able to find the exact match at that time. Now, when it comes to floor insurance, this law does NOT apply. The insurance company will only pay for what was damaged and not for replacing everything (which in some cases defeats the purpose of having flood insurance and paying such a high premium and deductible). 

Bottom line, is flood insurance worth it in Florida? Yes, but make sure you know exactly what you are signing up for when you select a policy. It is especially important to
read all the disclosures of the policies to make an informed decision when choosing a flood insurance policy. Remember, your insurance coverage can make a huge difference in funding repairs after a major disaster, but the details of your policy are important. 

While we are not insurance agents, we are happy to help you navigate general insurance questions or refer you to an insurance specialist whom we trust. Please feel free to reach out to our team via phone at (239) 360-3605 or email at at any time, and we’ll be happy to guide you in the right direction.