Flood Insurance in Florida - E Policy Review

Your homeowners insurance policy does not cover flood damage.

The entire state of Florida is in a flood zone, what zone is your home in?

Definition of a Flood- A general & temporary condition of partial or complete inundation of two or more acres of normally dry land area at two or more properties. (At Least one of which is your property)

Your lender may make flood insurance mandatory on your loan if your home is located in certain flood zones.

National Flood Insurance Program (NFIP)

The U.S. Congress established the National Flood Insurance Program (NFIP), with the passage of the National Flood insurance Act of 1968. Since then, the NFIP has been broadened and modified several times. The NFIP is administered by the Federal Emergency Management Agency (FEMA), a component of the U.S. Department of Homeland Security.

The NFIP provides access to affordable, federally backed flood insurance protection for property owners. The NFIP is designed to provide an insurance alternative to disaster assistance to meet the escalating costs of repairing damage to buildings and their contents caused by floods.

Participation in the NFIP is based on an agreement between local communities and the Federal Government. Almost everyone in a participating community of the National Flood Insurance Program (NFIP) can buy flood insurance. Nationwide, more than 20,000 communities have joined the Program.

With the NFIP, you are still eligible to purchase flood insurance after your home, apartment, or business has been flooded, provided that your community participates.

The NFIP was at one time financially self-sustaining until the hurricane seasons of 2004 and 2005 placed the program over $14 billion in the red, forcing the government to make up the difference, now due to super-storms and hurricanes the program is more than $23 billion in debt.

The program is not sustainable on its current path and with the advent of private carriers entering the market place the NFIP will rapidly become the carrier of last resort.

NFIP premiums will significantly increase over the coming years.

NFIP policy only offers a maximum coverage of $250,000 and contents coverage is limited to $100,000 . This means if it costs more than $250,000 to replace or repair your home or business, a standard NFIP flood policy simply will not be enough.

No wait on real estate closing.
Otherwise, 30 days.

Private Flood Insurance Markets

With the National Flood Insurance Premiums significantly increasing year after year “with no end in sight” and as new flood risk data is being developed across the Nation (including the issues of global warming), private insurers are starting to enter the U.S. flood insurance market place.

First on the scene is Lloyds of London, the most respected specialty insurance market place in the world.

Lloyds has created several private flood insurance markets in the U.S. with wide-ranging appetites for risk. Private flood insurance serves as an alternative to the governments National Flood Insurance Program and almost always offers better coverage’s for much lower premiums.

Every private market in our exchange is lender approved and meets the mandatory flood insurance purchase requirements of the 1994 National Flood Insurance Reform Act. Private flood insurance policies are fully compliant with Federal Law, and meet the stringent requirements of “Private Placement Insurance” imposed on them by the National Flood Insurance Program.

Private Flood Insurance programs can provide primary flood coverage for residential and commercial properties located in communities which do not participate in the National Flood Insurance Program as well as those in CBRA designated areas.

HOW PRIVATE FLOOD INSURANCE MARKET’S WORK

Private flood insurance carriers are “For Profit Companies”.

Insurance companies will very carefully examine your risk. Having the ability to pick and choose the properties they insure will result in much lower premiums than the “One Size Fits All” National Flood Insurance Program offered by the government. You will not be subsidizing those extreme high risk areas that seem to pop up in the news every year.

FloodSmart Insurance will develop an initial application and an indication of premium based on your coverage request. Our preliminary underwriting team will examine your potential risk and shop the available private markets for you. We will find you the best coverage’s for the most reasonable premiums possible. If your risk meets their guidelines they will make you an offer to purchase their policy. The offer is good for 30 days and generally can be extended if necessary.