Flood Insurance Hikes Kick In

Changes that raise bills for many federal flood insurance customers took effect at the beginning of the month, and Florida’s insurance commissioner reminded consumers they have expanding choices.

“A growing number of private companies in Florida are now offering regular flood insurance,” said Insurance Commissioner Kevin McCarty, noting some may be able to offer coverage at prices below the National Flood Insurance Program. “The actual cost will depend on where you live and the amount of coverage you choose.”

Congress acted last year to curb some of the steepest increases in NFIP rates, but they can still increase up to 18 percent annually for the roughly 20 percent of policies considered to be priced below risk. That recently included 268,000 in Florida, the most of any state, and about 5,000 in Palm Beach County.

And now there are new surcharges, $25 for primary residences and $250 for non-primary residences.

NFIP is still the dominant provider of flood policies, but a Florida law last year aimed to encourage private insurers to compete. A limited number of private insurers have been writing policies. Florida is by far the biggest market, home to close to 40 percent of the nation’s 5.6 million policies.

Property owners may not realize they may have other options besides the federal program so it’s wise to shop around.

A lengthy fight over how to revise federal flood maps gave an updated picture last year of how many people in Palm Beach County live in zones where a lender typically requires flood insurance. Even those not required to buy it might still want to consider it as hurricane season approaches June 1, McCarty said. To do so, they would need to buy a policy by May 1 as there is typically a 30-day waiting period.

“The water damage covered by a typical homeowners policy is usually limited to water that comes in from a hole in the roof or from a broken pipe inside the home,” McCarty said. “To cover the storm surge and freshwater flooding often associated with hurricanes and tropical storms, you should have a separate flood insurance policy.”

The average Florida flood policy cost $529 last year and the average flood claim in Florida in 2012 was $22,521, according to the NFIP.


Source:  Palm Beach Post

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