Florida Office of Insurance Regulation Advises More Changes to the National Flood Insurance Program Take Effect on April 1, 2016

 

In a consumer alert issued today, March 31, 2016, Florida Insurance Commissioner Kevin M. McCarty advised that changes to the National Flood Insurance Program (“NFIP”) become effective this Friday, April 1.  

Explaining that every person living in Florida is at risk from the impacts of flooding, he also encouraged consumers to consider purchasing flood insurance for the protection of their homes and businesses as they begin making preparations for the upcoming hurricane season.

“Although Florida’s hurricane season has been mild over the last 10 years, it is important that we not forget how easy it is for one storm to cause a great deal of damage and destruction from flooding.  Tropical Storm Fay is a good example of a storm that made slow progress through the state leading to massive flooding problems for several Florida counties back in 2008, ” Commissioner McCarty said.  “Consumers should carefully evaluate their insurance coverage now and have a plan in place for this year’s hurricane season.”

As a result of federal legislative reforms mandated by the Biggert-Waters Flood Insurance Reform Act of 2012 and the Homeowner Flood Insurance Affordability Act of 2014 (“HFIAA”), the NFIP changes taking effect on April 1 will include price and fee increases for all policies and the elimination of some subsidies for certain lapsed and reinstated Pre-Flood Insurance Rate Map (“pre-FIRM”) policies. 

On average, Floridians with policies on pre-FIRM primary residences could see individual policy increases between 15 to 18 percent. Certain pre-FIRM policies (including non-primary residential and business properties) may see an increase of 25 percent.  The federal policy fee will increase from $22 to $25 for preferred-risk policies and from $45 to $50 for standard-rated policies.  The annual HFIAA surcharge, which began last year, will remain at $25 annually for the primary residence of a homeowner and $250 for non-primary residences and non-residential properties.  Additional information is at www.floodsmart.gov.

Flood insurance is not typically covered under a homeowners insurance policy and must be purchased separately, Commissioner McCarty’s advisory explained.  Most flood insurance is administered through the NFIP, but several private insurance companies in Florida are also now offering this coverage at prices similar to or below those of the NFIP, giving Floridians more choices.  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, inasmuch as a typical policy purchased through the NFIP has a 30-day waiting period before it becomes effective.

Consumers can purchase flood insurance from the NFIP, usually directly from their existing insurance agent or company.  The insurance will cover up to $250,000 in property damage to a home and $500,000 to a business, along with additional contents coverage.  Excess flood insurance can be purchased from a private insurance company for homes and businesses valued at more than $250,000.

The Florida Office of Insurance Regulation provides information on private insurers writing primary or excess flood coverage in Florida along with resources available on flooding on its “Flood Insurance” Web page.

Hurricane season preparation tips, including a helpful list of Web sites and claims numbers for the top property insurance companies in Florida is on the agency’s “Hurricane Season Resources” Web page.

 

Should you have any questions or comments, please contact Colodny Fass.

 

 

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