Insuring a home in a flood zone has just become more expensive. Recent changes to the National Flood Insurance Program (NFIP) went into effect Oct. 1, 2021 for all new flood insurance policies, and will begin affecting existing flood policies at renewal. Under the new program, called Risk Rating 2.0, 80 percent of Florida’s flood policy premiums will be going up, according to FEMA, the government agency which administers the NFIP.
There is another option. Flood insurance written by a private company may be a good fit for you if your premium goes up under the NFIP, or if you need higher limits of coverage than that program offers (see below).
Who needs flood insurance?
Florida is surrounded by water and experiences frequent storms and heavy rain, so flood risk is higher here than in much of the U.S. Even if your home is not in a high-risk area, you may still want to carry flood insurance. Between 20 and 25 percent of flood losses in the U.S. are outside of a high-risk flood zone. (Click to find your flood zone.)
Damage from flooding can be devastatingly expensive—just one inch can do more than $25,000 worth of damage, and the average flood loss can be as much as $40,000. And remember, standard homeowners, renters, and business policies do not cover flood damage. You’ll need to buy a flood policy if you want coverage.
NFIP or private insurance?
Flood insurance policies cover physical damage caused by flooding to the structure and major systems of your home, as well as to your personal belongings, such as furniture, clothing, or electronics. However, the most you can insure for under the NFIP is $250,000 for your home and $100,000 for your personal property. If you need higher limits, you’ll likely have to buy a policy through a private flood insurance company.
With NFIP policies, there’s usually a 30-day waiting period. Policies offered by private insurers come with a shorter waiting period, or none at all.
Other things to be aware of while you’re shopping for a flood policy: some private flood insurance companies will not insure mobile homes, and very rarely, a mortgage company will not accept flood coverage from a private company. Make sure the policy you buy will satisfy your mortgage lender’s requirements.
Private flood insurance may be cheaper than NFIP coverage. Private companies have more flexibility in calculating their rates than the NFIP does, and that may result in a lower premium for consumers.
Let L & M Insurance Group give you a flood insurance quote
Don’t wait until a storm is brewing to decide you need coverage for flood losses. The agents at L & M Insurance Group can help you decide which flood insurance policy is right for you. In addition to writing for the NFIP, we represent several private flood insurance companies that write flood insurance at competitive rates. Click here to fill out an online request for a flood insurance quote, or call us at 813-672-4100.
