Flood Insurance

Most flood insurance policies currently providing coverage in Florida are underwritten by the National Flood Insurance Program (NFIP). The NFIP is managed by the Federal Insurance & Mitigation Administration which is a part of the Federal Emergency Management Administration (FEMA). These policies may be issued directly by the NFIP (NFIP Direct) or by various property and casualty insurance companies through a NFIP program called “Write Your Own” (WYO). Through the WYO program, the insurance company issues and services the policy, however the NFIP is responsible for paying any claims arising from the policy. A policy underwritten by the NFIP will always have a NFIP Policy Number listed on the declarations page.

The definition of a flood is the same regardless of whether your policy is underwritten by the NFIP or the private market. “Flood” means a general and temporary condition of partial or complete inundation of two or more acres of normally dry land areas or two or more properties, at least one of which is the policyholder’s property. For example, flooding in your yard, and in your neighbor’s yard or in the public street meets the requirement for flooding under the policy. Flooding of just one property is not considered to be a covered flood under a NFIP policy unless the area of water displacement is at least two acres. The flood must come from:

  • The overflow of inland or tidal waters; or

  • The unusual and rapid accumulation or runoff of surface waters from any source; or

  • Mud slides, (i.e. mud flows) which are proximately caused by flood, as defined above, and are akin to a river of liquid and flowing mud on the surface of normally dry land areas, as when earth is carried by a current of water and deposited along the path of the current; or

  • The collapse or subsidence of land along the shore of a lake or other body of water as a result of erosion or undermining caused by waves or currents of water exceeding the cyclical levels which result in flood, as defined above.

STANDARD NFIP FLOOD INSURANCE POLICIES: If you live in a community that participates in the National Flood Insurance Program (NFIP), your building and its contents can be covered. You must apply for building coverage and contents coverage separately.

Standard Flood Insurance: Standard flood insurance policies issued by the private market must provide the same coverage, including deductibles and adjustment of losses as the standard flood insurance policy under the National Flood Insurance Program.

Preferred Flood Insurance: Preferred flood insurance policies issued by the private market must include the same coverage as provided under standard flood insurance but:

  • It must include, within the definition of “flood,” losses from water intrusion originating from outside the structure that are not otherwise covered under the definition of “flood”.
  • Include coverage for additional living expenses.
  • Require that any loss under personal property or contents coverage that is repaired or replaced be adjusted based upon replacement cost settlement, up to the policy limits.

Customized Flood Insurance: Customized flood insurance policies issued by the private market must include coverage that is broader than the coverage provided under standard flood insurance.

Flexible Flood Insurance: Flexible flood insurance policies issued by the private market must cover losses from the peril of flood and may also include coverage for losses from water intrusion originating from outside the structure which is not otherwise covered by the definition of flood. Flexible flood insurance must include one or more of the following provisions:

  • An agreement between the insurer and the insured that the flood coverage is in a specified amount, such as coverage that is limited to the total amount of each outstanding mortgage applicable to the covered property.
  • A requirement for a deductible in an amount authorized under s. 627.701, including a deductible in an amount authorized for hurricanes.
  • A requirement that flood loss to a dwelling be adjusted based upon replacement cost settlement or adjusted on the basis of the actual cash value of the property.
  • A restriction limiting flood coverage to the principal building defined in the policy.
  • A provision including or excluding coverage for additional living expense.
  • A provision excluding coverage for personal property or contents as to the peril of flood.

Supplemental Flood Insurance: Supplemental flood insurance policies issued by the private market may provide coverage designed to supplement a flood policy obtained from the National Flood Insurance Program or from an insurer issuing flood insurance policies described above. Supplemental flood insurance may provide, but need not be limited to, coverage for jewelry, art, deductibles, and additional living expenses.

Regardless of the type of flood policy you purchase, there is generally a standard 30-day waiting period from the date of purchase before a new flood policy goes into effect. The 30-day waiting period does not apply if:

  • The initial purchase of flood insurance occurs in connection with the making, increasing, extension, or renewal of a loan regardless of whether the lender requires the coverage; or

  • The policy is assumed by a new owner of the property.

A community must apply for admittance to the Flood Program, and request a study of the area’s flood potential. This study results in a Flood Hazard Boundary Map being developed, and limited coverage amounts become available. At this point of the process, the community is said to be in the Emergency Program.

A more detailed study of the community then is completed, resulting in the publishing of a Flood Insurance Rate Map (FIRM). This will make higher limits of coverage available, but only if the community agrees to pass ordinances (building construction codes, zoning, etc.) designed to lessen or eliminate future flooding. When these requirements are met, the community is said to be in the Regular Program.

Eligible Building: A structure with two or more outside walls and a fully secured roof, located on a permanent site, with 50% or more of the value above ground level. It must be located in an eligible community.

Eligible Contents: Must be located in a fully enclosed building or secured to prevent floatation out of the building. Certain specific property in basements and under elevated floors of buildings is excluded from coverage.