New Changes to National Flood Insurance Program Take Effect Today
TALLAHASSEE, Fla. – With the beginning of hurricane season 60 days away, Florida Insurance Commissioner Kevin M. McCarty reminds Floridians that they have a choice when it comes to purchasing flood insurance, as premiums increase today on policies issued by the National Flood Insurance Program (NFIP).
“A growing number of private companies in Florida are now offering regular flood insurance, often at prices below the NFIP,” advises Commissioner McCarty. “The actual cost will depend on where you live and the amount of coverage you choose.”
Commissioner McCarty notes that NFIP premiums could increase by up to 18% starting today due to changes associated with the federal 2014 Homeowner Flood Insurance Affordability Act. The Act repealed 25% premium increases and modified a number of other provisions in the 2012 Biggert-Waters Flood Insurance Act. NFIP policies effective today also include new annual surcharges of $25 for primary residences and $250 for non-primary residences and non-residential properties.
The average Florida flood policy cost $529 last year and the average flood claim in Florida in 2012 was $22,521, according to the NFIP.
Greater consumer choice was made possible last year when the Florida Legislature passed, and the Governor signed SB 542, which streamlines the process for private insurance carriers to write flood insurance in Florida. The legislation provides an alternative to the NFIP. Three different types of flood coverage are allowed, all of which begin with the basic coverage provided under a standard NFIP policy.
The Office of Insurance Regulation (Office) maintains a list of current writers in Florida on its Flood Insurance webpage. The Office is working with the Legislature this session to provide Florida consumers with even greater flexibility and choice in purchasing private flood insurance.
Commissioner McCarty warns Floridians that with hurricane season just two months away, an important part of protecting your home and possessions is considering the purchase of flood insurance.
“The water damage covered by a typical homeowners policy is usually limited to water that comes in from a hole in the roof or from a broken pipe inside the home,” advises Commissioner McCarty. “To cover the storm surge and freshwater flooding often associated with hurricanes and tropical storms, you should have a separate flood insurance policy.”
For flood insurance coverage to be in effect at the start of hurricane season on June 1, homeowners and businesses should make the purchase by May 1, as a typical policy has a 30-day waiting period before it becomes effective.
Florida consumers can purchase flood insurance from the National Flood Insurance Program (NFIP), usually directly from their existing insurance agent or company. The insurance will cover up to $250,000 in damage to a home and $500,000 to a business, along with additional contents coverage. Excess flood insurance can be purchased from a private carrier for homes and businesses valued higher.