Many face recovery without insurance

Aug 21, 2008

Less than 30% of homeowners in county have flood coverage

Florida Today–August 21, 2008

With widespread flooding in Brevard County from Tropical Storm Fay, many homeowners are facing the harsh reality of not having flood insurance.

Less than 30 percent of single-family homeowners — about 185,000 homes — in Brevard have flood insurance, according to the latest figures available from the Insurance Information Institute, a nonprofit group that represents the insurance industry.

Statewide, fewer homeowners have flood insurance than they did last year, as some have opted to not buy it to save money, said institute spokeswoman Lynne McChristian.

Generally, homeowners who live in flood zones are required by their mortgage holder to have flood insurance. But others — a majority in Brevard — not required to have it often do not buy flood insurance, which is not included in standard homeowners’ and renters’ insurance.

"Two years without hurricane losses may have caused people to let their guard down," McChristian said. "The percentage of people buying flood insurance is extremely low."

A recent survey found that 39 percent of residents in the Southeast mistakenly think their homeowners policy covers damage from flooding during a hurricane or other storm, the Insurance Institute said.

In virtually all cases, however, only flood insurance will cover flood-related losses. The comprehensive coverage section of an auto insurance policy generally covers flood-related losses for vehicles, the Insurance Institute noted.

For those uninsured now facing the prospects of costly clean-up, think three words: federal disaster area.

If Brevard County is declared a federal disaster area, homeowners without flood insurance would be eligible to receive federal disaster aide, which currently offers a maximum of $28,000 per household, according to Jody Cottrill, a spokeswoman for the Federal Emergency Management Agency.

"People really would be better off if they purchased flood insurance," Cottrill added.

Alberto Nobili of Satellite Beach said flood insurance is not mandatory for him, but he has carried it for 30 years nonetheless.

"I’m so close to the beach, I carry it because I want to be sure," Nobili said Wednesday. "It’s for times like this. It gives me the peace of mind."

Flood insurance, which is backed by the federal government, for can be bought from an insurance agent or an insurance company representative and is available in communities participating in the National Flood Insurance Program.

All communities in Brevard County participate in the program, according the FEMA, which administers the flood insurance program.

There usually is a 30-day waiting period after a premium payment before a flood insurance policy goes into effect. The premium for a National Flood Insurance Program policy averages a little more than $400 a year, according to FEMA.

Annual premiums for flood insurance in general start as low as $119 and generally cover up to $20,000 in property damage for a home without a basement and up to $8,000 worth of contents. Some private insurers have started to offer excess flood insurance for homeowners who want an extra layer of coverage, according to the Insurance Institute.

The National Flood Insurance Program defines insurance-covered flooding as "a general and temporary condition during which the surface of normally dry land is partially or completely inundated. Two properties in the area or two or more acres must be affected."

Even homeowners who do not live in flood zones may want to buy flood insurance, as 25 percent of floods occur outside flood zones, said FEMA spokeswoman Mary Hudak.

Sheila Gaylor, co-owner of Bill & Sheila Gaylor Insurance Professionals in Melbourne, said she had not received any calls from customers filling flood-damage claims as of Wednesday. After Fay, however, Gaylor said she may see more customers wanting to buy flood insurance.

Overall, "my clients are sitting in pretty good shape," Gaylor said, adding that she has customers sign waivers so they understand that their standard homeowners’ policies do not cover flood damage.