Many of you may be unaware that flood insurance is not provided within the typical HO-3 or HO-6 homeowner’s or condo insurance policy. In fact, flood insurance is a program controlled entirely through the efforts of FEMA and the federal government—not state admitted insurance carriers.
While you can buy flood insurance through a number of companies, it all goes back to the Federal Flood Insurance Program.
Crunching the Numbers on Flood Insurance
At the current time, the Federal Flood Insurance program is over $30 billion in debt, considering the costs of Hurricane Sandy and the tremendous expense of Hurricane Katrina in New Orleans back in 2005. Considering this number, the program only pulls in $1.5 billion in premium each year from insureds—at this rate, with no more subsequent major floods, it would take the program 20 years to break even.
The National Flood Insurance Program currently issues about 5.6 million flood insurance policies across the United States. These 5.6 million policies make up $1.5 trillion in risk exposure—an expense that would cripple the livelihood of ever having flood insurance if the program doesn’t find a way to fix their over exposure. Hence the enactment of the Biggert Waters Flood Reform Act.
A typical flood insurance policy in a premium risk area of South Florida is under $500 per year. Keeping in mind that the program paid out $37 billion after Hurricane Sandy, an area of the US not considered “high risk,” it’s clearly in your best interest to hold a flood insurance policy. That $500 average policy price could be the difference between repairing your home after a flood or walking away with nothing.
Onward to the question at hand:
Is it necessary for you to carry flood insurance on your South Florida home?
Ask yourself these questions:
- Do I live within 100 feet of any water source (canal, lake, inlet, etc)?
- Is my home/condo located on a negative-elevation home site?
- Am I susceptible to my home or condo being moved from it’s foundation from rising water?
In South Florida, you’d be overwhelmed at the yes answers to these questions. If you’re worried about any of these, it’s a great idea to have flood insurance coverage.
Take a look at the current flood map for Broward County here. Then, take a look at the proposed flood map for next year here.
As you can see, many high risk areas as of right now won’t be considered high risk come next year. That doesn’t mean you don’t have to worry about coverage, it means that your premium will be lower or not susceptible to the premium increases proposed in the Biggert-Waters Flood Reform Act of 2012.
Be Safe, Not Sorry
It’s in your best interest to carry flood insurance. Look what happened to the Northeast United States during Hurricane Sandy. While many individuals were covered on the program, many didn’t get any support for their damage.
Call North Broward Insurance Solutions in Margate, Florida today at (954)368-0060 for more information on how to obtain Flood Insurance on your home or condo. While the map may not say you’re in a high risk area, Florida IS a peninsula and we’re all close to the shoreline here in South Florida. Don’t take the risk not to be part of the National Flood Insurance Program.