Why Flood Insurance Is Important In Florida
Coastal storms are one of the biggest causes of flood damage in the state of Florida. Following Hurricane Ian, all Florida residents who carry with Citizens Property Insurance Corp. are now required to carry flood insurance in addition to standard home insurance policies. Discover what is included in flood insurance and the risks of not carrying a policy with the team at West Point Insurance Services, then contact our sister company, FloodWyze® to get a quote and start shopping for flood insurance in Florida.
What is Included in Flood Insurance?
A flood is categorized as an excess of water on otherwise dry land, which affects two or more acres or two or more properties. There are typically two types of flood insurance offered: building coverage and contents coverage.
Building coverage includes:
- Electrical & plumbing systems
- Furnaces & water heaters
- Refrigerators, cooking stoves, built-in appliances
- Permanent carpeting
- Permanent cabinets, paneling, & bookcases
- Window blinds
- Foundation walls, anchorage systems, & staircases
- Detached garages
- Fuel tanks, well water tanks & pumps, & solar energy equipment
Contents coverage protects your:
- Personal belongings, such as clothing, furniture, & electrical equipment
- Washer & dryer
- Portable & window air conditioners
- Microwave oven
- Carpets not included in building coverage
- Valuable items, such as artwork or furs (up to $2,500)
What Can Flood Insurance Do For You?
The right flood insurance plan will protect you from damages associated with natural disasters and most unforeseen circumstances. Flood insurance helps the insured avoid paying the cost of these damages out-of-pocket. Depending on the claim, the value of the building coverage for flood damage is based on either the Replacement Cost Value (RCV) or the Actual Cash Value (ACV). RCV is the cost to replace a part of a building that has been damaged, which meets three conditions:
- The building is a single-family dwelling,
- It is your principal residence, meaning you reside in the home 80% of the year,
- And your building coverage is at least 80% of the full cost of replacement for the building, or reaches the maximum available under the NFIP.
ACV is the RCV at the time of the loss. Some items in the home are always adjusted on this basis, such as the value of wall-to-wall carpeting, which can decrease by between 10-14% in value each year.
Since flood insurance is now required in Florida for Citizens policyholders, there is always a chance of residents paying too much for coverage they never use. That’s where the right private insurance agency comes in. Choose your agency wisely and ensure your coverage is based on your true level of risk. Get flood-wise with our sister company, FloodWyze, and work with agents with years of experience helping Florida homeowners find the right coverage.
Why is Flood Insurance Required in Florida?
Following Hurricane Ian, the Florida state Legislature approved a precedent-setting bill requiring all Florida property owners with Citizens Property Insurance Corp. to buy flood insurance. According to federal law, property owners are required to have flood insurance on a property inside a flood zone, even if a federally backed mortgage offers security. However, Florida is the most flood-prone state, in which only 19% of households held flood insurance policies as of December 2022. With dozens of local insurance agencies declaring bankruptcy due to mounting losses, many insureds began flocking to Citizens, and Florida became the most expensive state in the country for property insurance, as reported by the Insurance Information Institute (Climatewire, June 22).
Curious about buying flood insurance in Florida or across the coast? Get in touch with the experts at FloodWyze for knowledge on all-things flood. Looking to expand your insurance company with expert workflow technology and business process outsourcing? Reach out to West Point Insurance Services.
Check out our last blog about what we learned from Hurricane Ian. Be sure to keep an eye out for our next blog where we will discuss the effects of population growth on insurance in Florida.