The most common and most damaging natural disasters in the country are floods. Most homeowners’ and business insurance policies do not cover flooding. OIR encourages consumers to be prepared and consider flood insurance coverage.
Flooding is a serious risk in Florida due to the state’s geography, the frequency of storms, and proximity to water, both inland and on the coast. Insurance to cover this risk is not typically provided in a homeowner’s policy, so it must be purchased separately. Depending on a home’s location, flood insurance may be a required purchase as a condition of a mortgage.
A vast majority of flood insurance coverage is federally regulated and provided through the National Flood Insurance Program (NFIP), which is administered through the Federal Emergency Management Agency (FEMA). To qualify for flood insurance, a community must join the NFIP and agree to enforce sound floodplain management standards. When this happens, the residents in that community are allowed to participate in and purchase flood insurance coverage through the NFIP. The NFIP Write Your Own (WYO) Program allows participating property and casualty insurance companies to write and service the Standard Flood Insurance Policy in their own names.
OIR has worked to expand Florida’s private flood insurance market, providing for more consumer choice and competition in the marketplace. Insurance companies writing in the private flood insurance market are currently writing primary or excess flood insurance outside of the NFIP. Some of these companies write only a limited number of policies or only certain types of flood policies, such as for high value homes. The coverage can be written as a stand-alone flood policy or as an endorsement onto a homeowner’s policy.
Know Your Risk
FEMA's flood map service can help consumers determine their flood risk. Depending on the location, consumers may qualify as a high risk, moderate/low risk, or undetermined risk.
- High-risk areas have at least a 1 percent chance of flooding each year. Homeowners in these areas with mortgages from federally regulated or insured lenders are required to buy flood insurance.
- Moderate to low-risk areas have less than a 1 percent chance of flooding each year, but there is still a possibility the area could flood. Flood coverage isn't required in these areas, but it is recommended. Some mortgage lenders still require you to have flood insurance in non-high-risk areas.
- Undetermined risk areas are areas where flood-hazard analysis has yet to be conducted, but risk still exists.
Flood insurance coverage is available for homeowners, condo unit owners, renters, and businesses.
Can flood insurance be purchased during Hurricane Season?
Yes. However, if a consumer is looking for flood insurance in advance of a known storm, it is important to consider that some policies take time to take effect. OIR encourages all consumers to plan well in advance.
How much does flood insurance cost?
The price for flood insurance varies by provider and proximity to flood zones. NFIP coverage is typically around $700 a year in high risk areas. Property owners located in low-to-moderate risk areas should ask their agents if they are eligible for the Preferred Risk Policy, which provides flood insurance protection at a lower cost than a standard policy in a high-risk area. Consumers are encouraged to shop around and contact their agent for the coverage that best suits their needs.
What type of coverage is included with flood insurance?
Generally, NFIP standard flood insurance policy pays for direct physical damage to the insured property up to the replacement cost or actual cash value (ACV) of actual damages, or the policy limits of coverage, whichever is less. A summary of coverage for NFIP policies can be found here. Private insurers may have higher limits or broader coverage than NFIP policies. For private flood policies, be sure to speak with the insurer or agent regarding coverage.
How do I know if my community participates in the NFIP?
The NFIP is administered through FEMA. Florida leads the nation in the number of NFIP policies in force. To qualify for flood insurance, a community must join the NFIP and agree to enforce sound floodplain management standards. To find out if your community participates in the NFIP:
- Visit floodsmart.gov
- Contact your local emergency management office
- Call your insurance agent