Did you know that flood insurance in not included in your homeowner’s insurance policy? Understanding flood insurance requirements in Florida does not necessarily require an insurance agent’s license, but it doesn’t hurt to have an experienced broker guide you through all the information.
Why Purchase Flood Insurance?
After the incredible hurricane season of 2005, with three hurricanes and two tropical storms (not to mention the close brushes with storms), the financial impact on property insurance providers to the state was significant. Lawsuits increased in number as many residents found out the hard way that their homeowner’s insurance did not cover rising water.
Flood insurance could have saved some homeowners in Florida significant headaches. It is a relatively inexpensive policy, but some prospective homeowners might want to know if they are required to have it. It is easy to learn the flood insurance requirements and whether it is a good idea to purchase the coverage.
Where to Look
Flood insurance is sold by only one group, the National Flood Insurance Program, backed by the United States federal government through the Federal Emergency Management Agency (FEMA). FEMA determines flood zones using historical records and Google mapping. If you are looking at a particular piece of real estate and wonder whether it happens to be in a flood zone, you can consult the FEMA Map Service Center and enter the street address, city, and zip code.
Flood zones are typically marked “AE” on the flood zone maps and are areas that have flooded in the past; however, just because a property is not located in a marked flood zone does not mean it is safe from flooding. As a mortgage goes through the underwriting process and title search, you may learn that the area in which you are interested sustained flood damage within the last twenty years. If this is the case, the mortgage company could require that you carry a flood insurance policy.
How to Purchase Flood Insurance
The majority of property insurance carriers in Florida can provide you with a price through the National Flood Insurance Program. The prices for these policies, coverage limits, and deductibles are set by FEMA. The policy is issued and managed by FEMA; therefore, after the policy is purchased, your agent will no longer have any part in its handling.
It is not unusual to be informed in the final stages before a closing that a flood insurance policy must be purchased. But don’t worry: Policies and deductibles are reasonable. They range from $40 to $100 per month and cover both property and dwelling contents.
If you are interested in a particular piece of real estate and wonder whether you will be required to purchase flood insurance, consult the FEMA flood maps. If the property is not in a flood zone, a high-risk zone (areas susceptible to hurricane storm surge), or near other bodies of water, it is unlikely you will be required to purchase flood insurance, but the mortgage company will have the final say.