Florida flood insurance

Why Florida homeowners need flood insurance

Despite much of Florida being at risk for flood damage, only 13 percent of homes in the state have a flood insurance policy.  But the National Flood Insurance Program (NFIP) notes that the average claim payout for Florida flood damage is $28,900, which means that homeowners without flood insurance are risking hefty expenses. Flood insurance can help pay for the devastating damage that floods can cause — even one inch of water can cause up to $25,000 in damage to a home.

Flood insurance is not a part of standard homeowners insurance coverage. Many homeowners mistakenly think that flood damage will be covered by their home insurance policy, only to find out that they must pay for damages out of pocket. Considering and potentially purchasing flood insurance before a flood event happens — most policies have a 30-day waiting period, with a few exceptions — could help you protect your finances from the threat of costly repairs.

Flood insurance mandate for Citizens policyholders

Historically, the flood insurance uptake in Florida is low compared to the state’s overall flood risk, but this has been changing. In an effort to address the ongoing Florida homeowners insurance crisis, the state legislature passed Senate Bill 2-A in December of 2022. Among the many features of the bill was a new flood insurance requirement for Floridians insured with the state-backed insurer of last resort, Citizens (which currently holds over a million homeowners policies in the state).

The state is allowing for a roll-out approach regarding the flood insurance mandate. Unless you live in a special flood zone as defined by FEMA, the deadline to obtain flood insurance to be eligible for a Citizens homeowners policy varies depending on how much your home is worth, as demonstrated by the table below:

Keep in mind that if you live in a special flood zone hazard area as determined by the FEMA flood map, you must have had flood insurance by April 1, 2023 if you were applying for a new Citizens homeowners policy. Those in a special flood hazard zone already insured with Citizens were required to obtain flood coverage by July 1, 2023 (or by your next renewal if it fell after this date).

Additionally, if your Citizens homeowners policy excludes wind as a peril, you will not be required to obtain flood insurance.

Cost of flood insurance in Florida

Flood insurance in Florida is available from the National Flood Insurance Program (NFIP), with the backing of the Federal Emergency Management Agency (FEMA) and several private insurers. NFIP insurance is available when you live in an area that supports floodplain management ordinances; currently, the NFIP has over 23,000 participating communities. The NFIP reports that the average cost of flood insurance is $888 per year, but your rate will depend on your specific rating factors and may be much higher depending on your area’s risk level. Rates have been increasing across much of Florida, especially in higher risk areas where rates rose $20 (or more) monthly for over 4 percent of flood policyholders, based on RR 2.0 data.

FEMA uses flood zones to determine flood risk in a given area. Different flood zone designations have different risk levels. Generally, zones B, C and X have a moderate-to-low risk of flooding, while zones that start with A or V have a higher risk. Subzones, like zone AE or zone V1, exist within the high-risk zones to give a more detailed view of the risk in that area. A location with a zone D designation means no mapping has been done in that area, and the flood risk is unknown. Generally, the higher the risk of flooding in your area, the more expensive your policy is likely to be.

Before you select a policy, check with your mortgage company to see what, if any, specific requirements exist for your flood insurance.

When to purchase flood insurance

Most flood policies require a 30-day waiting period before your coverage kicks in, so planning ahead and buying your coverage well before a storm is essential. If a storm is coming your way, it’s already too late to protect your home with flood insurance; in addition to the waiting period, the NFIP and private flood insurance companies may put a moratorium in place, which halts the sale of new policies. A few exceptions to the 30-day waiting period exist, including if you are closing on a loan or if your home is newly mapped into a high-risk area. Still, for most homeowners, coverage will start 30 days after purchasing a flood policy.

How to purchase flood insurance in Florida

When you are ready to buy, you might want to get quotes for NFIP coverage as well as from some of the several private flood insurance companies in Florida. If you choose to purchase insurance from the NFIP, you can purchase your flood insurance policy from NFIP Direct or an insurance company that helps facilitate NFIP policies.

You can also contact private insurance companies that offer their own flood insurance. These policies will be underwritten by a private insurer, not by the government. Rates for private flood insurance likely vary from NFIP rates, and you may have different coverage options.

The Insurance Information Institute (Triple-I) highlights the top 10 writers of private flood insurance in 2022 by market share:

1. American International Group (AIG)
2. Zurich Insurance Group
3. Assurant Inc.
4. AXA
5. Berkshire Hathaway Inc.
6. Swiss Re Ltd.
7. Sompo
8. Liberty Mutual
9. Chubb
10. Allstate Corp.

Frequently asked questions