As a Floridian, you’re no stranger to hurricanes
or to floods
. That means you’re pretty familiar with flood insurance, too. But you may not be aware of the recent changes that have taken place in the law. And these changes have created a rising tide of confusion for homeowners and communities when it comes to flood insurance. The good news? These changes are meant to help and protect you
. So in addition to the coverage required by law, take a look at the new changes below and see how your policy might need to change. Here are five things you should know about the law and flood insurance:
1. It's getting cheaper, thanks to grandfathering.
Thanks to the Homeowner Flood Insurance Affordability Act – signed into law by President Obama in March of this year – the cost of your flood insurance may be significantly lowered. Among other provisions, the new law reinstates grandfathering of properties into older, original flood maps when new post-flood maps are re-drawn. So if your property was built to code prior to a flood, you can maintain your original flood map status (and its associated lower rate).
2. Premium rates are capped.
The Flood Insurance Affordability Act constrains FEMA’s ability to raise premium of a single property class and caps their increases at a yearly 15% average. Individual caps are set at 18% annually.
3. You'll save when you remodel or renovate.
Post-flood remodeling and renovations used to result in an automatic premium increase if the work you did on your home met 30% of your home's value. Under the new law, that percentage has been raised to 50%, which means you can make more repairs and improvements without paying heftier flood insurance premiums.
4. You might get a rebate.
The new law repeals many of the rate increases that we’ve been living with for years. Because of this, you may be entitled to a refund. Talk to your insurance broker to see if you qualify.
5. Flood insurance in Florida is becoming more available.
Thanks to a state bill the Florida legislature passed during the 2014 Session and signed into law by Governor Scott, (SB 542); residents should have even more options beyond what’s offered by the national law. The state initiative would encourage more private insurers to offer flood insurance products, which will increase competition in the marketplace and provide more choices for property owners. It is strongly encouraged that you speak to your insurance agent or risk management advisor to determine if your property now qualifies for private market flood peril coverage.
6. Potentially, you could buy less than the federal flood program mandates.
Again, thanks to the new Florida law, you as the policyholder, have more control over the type of product you require. You now have the flexibility to include or exclude contents coverage, other structures on your property, and living expenses. While the federal flood program will help matters, legislation such as SB 542 is helpful as it brings equity to Florida property holders. According to the Tampa Bay Times, over the history of the national flood insurance program, 37% of its policies have been written in Florida – yet only $3.7 billion of its $50 billion total payments have come to the Sunshine State. New laws like these can be confusing – but staying abreast of them can have a significant impact on your bottom line. A good property management company will have its finger on the pulse of what's happening in current legislation. For more information, contact FirstService Residential
, Florida’s leading residential community association management company.