Flood InsuranceThe best time to think about flood insurance is before the flood! Let us help make sure you're properly covered!
A potentially catastrophic exposure for many persons in Florida is Flooding. Yet, all property policies specifically exclude flood from their coverages.
A Flood is defined as:
- a “general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from:
- The overflow of inland or tidal waters
- The unusual and rapid accumulation or runoff of surface waters from any source
- Collapse or subsidence of land along the shore of a lake or similar body of water as a result of erosion or undermining caused by waves or currents of water exceeding anticipated cyclical levels that result in a flood.
Flood insurance through the National Flood Insurance Program is only available on “eligible” buildings or “eligible” contents in “eligible” buildings in an “eligible” community.
Flood Insurance Forms Available
Dwelling Form: For policies written on 1-4 family dwellings and includes up to 10% of the dwelling limit to apply for detached garages. Other separate structures that service dwellings (Garage Apartments, Utility Buildings, Storage Sheds, etc.) can be insured under the dwelling form, but require a separate policy.
Preferred Risk Policy (PRP): Is written for any risk except those that are eligible for Residential Condo Building Association Policy. Preferred Risk Policies are only available in Flood Zones B, C or X. They are not available in the Emergency Program. They are issued in specific package limits on dwelling and contents.
The General Property Policy Form: Applies for all buildings and/or their contents that are not eligible to be insured under the Dwelling Form, except for the condominium policy (RCBAP).
Residential Condominium Building Association Policy Form (RCBAP): This form applies for any condominium association with one or more residential units if at least 75% of the total floor area is residential and if the building is located in the Regular Program, not the Emergency Program.
Everyone is at some risk of damage from flooding
Flooding is the #1 natural hazard in the United States. Remember, Homeowners Insurance does not include coverage against flooding. The Petrucci Agency can offer Flood Insurance as a separate National Flood Insurance Policy.
Flood policies are written on the “paper” of 88 private insurance companies – all the rates, rules, and claims handling are dictated by the Federal Flood Program, which underwrites the coverage. Claims payments are funded by Flood Insurance premiums.
Flood claim payments do not require paybacks, while most forms of federal disaster assistance require a Presidential declaration, and the most typical form of disaster assistance is a loan that must be repaid with interest.
Flood Insurance coverage is usually provided through the National Flood Insurance Program (NFIP), which was created by congress to assist homeowners in acquiring flood insurance at the best possible rates depending on the risk in their particular area.
As noted on the NFIP website, just a few inches of water can cause thousands of dollars damage to your home. Over the past 10 years, the average flood damage claim amounted to over $33,000. Since one storm can cause inches of rain and one blocked sewer or draining system can lead to a major flood, a proper flood insurance policy, designed for your particular risk area is definitely worth the investment.
Building coverage includes such things as water heaters, central air systems, fuel tanks, and furnaces. Flood Insurance does not cover land, trees, septic systems, docks, gazebos, fences or seawalls, and swimming pools.
Most people are unaware that their basic homeowner policy does not cover flood.
The storm surge from a hurricane is considered flood damage, so this damage is not covered by home insurance under the hurricane/windstorm peril. You must have separate hurricane and flood insurance to adequately protect your home.
After Tropical Storm Faye hit in 2008, literally thousands of homeowners were completely wiped out because they did not have adequate flood insurance coverage for damage from the storm’s flooding. Water that appears to “flood” a home is not covered unless it came in through blown out windows or roof destroyed by the windstorm. Rising water coming in from outside is otherwise not covered. Even if some water has penetrated the home from a broken window or damaged roof it is easy to determine the amount of “flood” damage compared to waters from windstorm by a line that the flood waters leave on exterior walls, trees, shrubs, etc. outside the property after the waters recede.
As long as your home is in a NFIP community, you can buy flood insurance.
There is a 30 day wait when purchasing a new flood policy. If a policy is purchased in connection with a mortgage or a revision of a flood rate map, the wait does not apply.
Over a 30 year mortgage, a homeowner has a 26% chance of flooding vs. a 9% chance of having a home fire.
If you are a resident living in a “Special Flood Hazard Area” and have a mortgage from a federally regulated lender, you will be required to purchase a flood policy. Everyone who lives in a special flood hazard area should analyze their risk and consider the purchase of flood insurance regardless of a mortgage requirement.
Those outside of the high risk areas should also consider flood protection. 25% of all flood insurance claims are filed in low to moderate-risk areas.
Everyone: renters, business owners, home owners, and condo unit owners need flood coverage.
Consider a condo unit owner on the 5th floor where flood water intrusion is unlikely, yet the storm surge could cause the entire building to be condemned, thus triggering the need for a flood policy.
Inland flooding has occurred repeatedly after intense rainfall and a story system stalling while continuing to dump levels of rain that create flash flooding.
The development of new land can increase flood risks in communities especially if the natural runoff paths are changed.
Replacement Cost or Actual Cash Valuation
A single family dwelling that is your principal residence can be insured at Replacement Cost, if you reside in the dwelling at least 80% of the time, and if you carry at least up to 80% of the replacement cost in coverage or the maximum available for property under NFIP. Replacement cost is also provided for building losses in the Residential Condominium Building Association Policy (RCBAP), subject to Coinsurance Clause.
All other flood losses are valued at Actual Cash Value. Personal Property (contents) are always covered at Actual Cash Value. Additional living expenses are not covered. Damage from mold and mildew that could have been avoided is not covered. Valuable Papers and currency are not covered.
You are at risk! The cost of flood insurance is affordable. Please contact one of our representatives at our Orlando or Rockledge offices today to discuss your flood insurance coverage needs and find the best policy for you.
Remember: In Florida, everyone lives in a flood zone! Don’t let a flood wash away your financial security.