Florida Insurance Commissioner Reminds Of National Flood Insurance Program Changes Effective Today
Apr 1, 2015
In a news release issued by the Florida Office of Insurance Regulation (“OIR”) today, April 1, 2015, Florida Insurance Commissioner Kevin McCarty reminded Floridians they “have a choice” in purchasing flood coverage, inasmuch as National Flood Insurance Program (“NFIP”) premiums could increase up to 18 percent today pursuant to the federal 2014 Homeowner Flood Insurance Affordability Act, which repealed 25 percent premium increases and modified a number of other provisions in the Biggert-Waters Flood Insurance Act of 2012.
“A growing number of private companies in Florida are now offering regular flood insurance, often at prices below the NFIP,” Commissioner McCarty advised consumers. “The actual cost will depend on where you live and the amount of coverage you choose.”
The 2014 enaction of SB 542 streamlined the process for private insurance carriers to write flood insurance in Florida. The new law provides an alternative to the NFIP through three different types of flood coverage, all of which begin with the basic coverage provided under a standard NFIP policy.
NFIP policies effective today include new annual surcharges of $25 for primary residences and $250 for non-primary residences and non-residential properties. According to NFIP data, the average Florida flood policy cost $529 last year, while the average flood claim in Florida in 2012 was $22,521.
The OIR maintains a list of current writers in Florida on its Flood Insurance Web Page.
With 60 days until the beginning of hurricane season, Commissioner McCarty warned that the purchase of flood insurance should be deemed by homeowners as an important part of protecting their residence and possessions.
“The water damage covered by a typical homeowners policy is usually limited to water that comes in from a hole in the roof or from a broken pipe inside the home,” Commissioner McCarty explained. “To cover the storm surge and freshwater flooding often associated with hurricanes and tropical storms, (consumers) should have a separate flood insurance policy.”
For flood insurance coverage to be in effect at the start of hurricane season on June 1, homeowners and businesses should make the purchase by May 1, inasmuch as a typical policy has a 30-day waiting period before it becomes effective, the OIR noted.
Florida consumers can usually purchase NFIP coverage directly from their existing insurance agent or company. The NFIP will cover up to $250,000 in damage to a home and $500,000 to a business, along with additional contents coverage. Excess flood insurance can be purchased from a private carrier for homes and businesses with a higher value.
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