Types of Flood Insurance Available in Florida

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It shouldn’t come as a surprise: Florida has the highest risk of flooding among all 50 states. According to one report “More than 1.6 million people live in the 638 square miles of Florida’s coast that are less than one meter above sea level.” While the Orlando area is not in the 100-year flood plain, the risk isn’t just to waterfront properties, but also to those in areas where the drainage system can be overwhelmed during a heavy rain event.

Even if you have homeowner’s insurance (required by mortgage lenders, but important even for those who don’t have a mortgage), or commercial property insurance, coverage for flooding is not included and must be purchased separately. Thinking that just because you haven’t experienced a flood in the past decade or more, and therefore you don’t need flood insurance, is to put your most valuable asset, your home or your business property, in jeopardy.

Flood insurance for homeowners

Homeowners can obtain flood insurance either through the federal government’s National Flood Insurance Program (NFIP) or through a private insurer. If your home is your primary residence, your premiums will be lower than if it’s a rental property if you occupy it fewer than 183 days out of the year. Federal flood insurance is available “only in those communities that have been designated as participating in the NFIP by the Federal Emergency Management Agency (FEMA).” Other factors that determine the cost of NFIP insurance include:

  • Whether your house is located in a floodplain
  • The elevation of the lowest floor relative to the elevation of the 1 percent annual chance of flood
  • The age of the house
  • The type of structure
  • The deductible (how much of the cost of any damage you are willing to assume)

Private insurance may be less expensive than that offered by through NFIP and may also have a greater range of options, including higher coverage limits, but they are also not backed by state guarantee funds (meaning if they go bankrupt, you are out of luck). You should also check with your lender as they may not accept a private flood insurer. Choosing the right flood insurance for your situation is a major decision. Do your homework to make sure that you get the best possible coverage for your home and personal property.

Commercial property flood insurance

Primary flood insurance for commercial properties is available through the National Flood Insurance Program (NFIP), which is administered by the Federal Emergency Management Agency (FEMA). It can be purchased through a private insurer who offers NFIP flood insurance as a Write-Your-Own (WYO) policy. If you have a loan or mortgage on your commercial property, your lender will likely require that you have flood insurance. Buildings that are eligible for commercial flood insurance include:

  • Non-residential buildings (office buildings, retail buildings, etc.)
  • Residential buildings with five or more family units
  • Residential condominiums that have at least 25 percent non-residential occupancy

NFIP commercial flood insurance covers up to $500,000 for the building property and up to $500,000 for personal property (meaning the contents of the business such as “furniture and fixtures, machinery and equipment, and other personal property owned by you and used in your business,” among other items. It does not cover “damage caused by moisture, mildew, or mold that could have been avoided by the property owner or damage caused by sewer or drain backup unless there is a flood in the area that caused the backup. Moreover, it doesn’t cover the loss of “currency, precious metals, and valuable papers such as stock certificates, script, and recorded data.”

In many cases, you can opt for a private flood insurance policy. It may be less expensive and gives you the options to add business interruption and greater coverage, among others, that aren’t available through NFIP. As a business owner, you know the value of looking into all your options to find the one that is best for you.

Learn more about how we can help with your flood insurance matters

To schedule a time to discuss your needs, please contact us online or call Johnson & Williams, P.A. at (407) 245-1268 to set up a consultation.