How Much Is Flood Insurance In Florida?
If you have a mortgage, there's a good chance you'll be required to have a flood insurance policy if you live in a high-risk area for flooding. Even if a mortgage lender doesn't require you to have this insurance, it may be a prudent way to protect the investment in your home.
Flood insurance is not included in standard homeowner's policies, and yet floods are a fairly common type of disaster that can cause extensive damage to a property. As a low-lying state surrounded on three sides by water, Florida is particularly prone to flooding.
The National Flood Insurance Program (NFIP), offered through the Federal Emergency Management Agency (FEMA), offers flood insurance to homeowners in areas at high risk for flooding, but a private insurer may offer a cheaper rate, if you qualify.
This article will give you some background on Florida flood insurance, including:
Cost of Flood Insurance in Florida
The average annual cost of flood insurance in Florida is $626, including premium and fees. Of course, rates vary according to the level of coverage you need and where your home is located. The average cost of an NFIP insurance policy in Florida works out to $242.41 for every $100,000 in coverage.
These figures are just for NFIP policies. While that program was designed to make flood insurance for at-risk properties affordable, you might be able to get cheaper coverage through a private flood insurance policy.
Cost of Private Flood Insurance in Florida
Flood insurance from a private insurer may offer rates as low as $500 if you're in a low-risk flood zone. Similar to NFIP policies, actual premiums on private flood policies will depend on multiple factors, including your flood zone, foundation type and square footage. According to one private flood insurer in Florida, rates in a low-risk flood zone may range from $500 to $1,000. Premiums in higher-risk zones can soar to $5,000 and up.
Below, we shared quotes on how flood insurance may vary by flood zone. The quotes are provided by The Flood Insurance Agency:
Annual Premium Quote
Source: The Flood Insurance Agency (TFIA)
Description: Single-story single family home
Year constructed: 1976
Square footage: 2,023
Building coverage: $250,000
Contents coverage: $100,000
Do You Need Flood Insurance in Florida?
Your mortgage lender may require flood insurance. Even if they don't, a flood policy may protect your property if a flood damages your home and belongings.
If you have a mortgage backed by the federal government, the terms of that loan may require you to have flood insurance if you live in an area that is considered a high flood risk. According to the New York Times, these federally-backed loans represent about 70% of all mortgages.
Even if your mortgage is not federally-backed, your mortgage lender may require you to carry flood insurance. After all, the property is the collateral for the loan. That insurance protects the lender from losing their collateral to a disaster. Flood insurance can provide a crucial form of coverage that standard homeowner's policies don't include.
Protecting your investment
Even if you don't have a mortgage that requires you to carry flood insurance, it might be wise to protect yourself from the devastating financial losses of a flood.
According to the NFIP, flooding causes an average of $5 billion in damage nationally each year. About 40% of the claims the NFIP covers come from outside what are considered high-risk flood zones, so this type of disaster can strike almost anywhere.
Besides covering you against loss, the NFIP can provide up to $30,000 in funding for flood mitigation measures, to help insured properties avoid some of the damage that floods can cause.
Private Insurance vs NFIP
The NFIP is not your only option if you're looking for flood insurance in Florida. In fact, it is well worth looking at private insurers before you settle on a flood insurance policy. Every insurance company uses its own methods of assessing risk. This is one reason why premiums differ so much.
You may be able to find a private insurer that would charge you a cheaper rate for flood insurance than the NFIP. In fact, the NFIP recently changed its risk assessment methodology. According to the NFIP, most policyholders will see an increase in premiums due to this change.
Besides cost, another reason to consider a private insurance company is to get coverage that more fully reflects your property's value. NFIP coverage is capped at $250,000 for your home and $100,000 for the personal property in the home. With many homes in Florida worth well over $250,000, you might need another source of insurance to cover your potential losses.
Flood Insurance Companies in Florida
Here is a list of insurance companies that provide NFIP policies in Florida:
Auto Club South
Avatar Property and Casualty
Bankers Insurance Group
Farmers Insurance Group
FedNat Insurance Company
Southern Farm Bureau
United Property & Casualty
Hartford Fire Insurance
USAA General Indemnity
Wright National Flood Insurance
Florida Flood Insurance FAQs
Do all homeowner's insurance policies include flood coverage?
No, flood insurance is typically excluded. However, it can be added to a standard homeowner's policy at an extra cost.
Am I required by state law to have flood insurance in Florida?
No. Most likely, any requirement to have flood insurance will come from your mortgage lender. Also, when you consider the risk you might decide that having flood insurance is common sense even if it isn't required.
Do I have to buy my flood insurance through the National Flood Insurance Program?
No. That NFIP program is there to make sure flood insurance is available to people who may need it, but private insurers also provide coverage, with wider choices, better coverage and cheaper prices.
Get Affordable Florida Flood Insurance Coverage Now
With NFIP premiums rising for most policyholders, this is a perfect time to shop around and see if there are more affordable coverage options out there. Don't rule out the idea of getting a private flood insurance policy until you've compared prices because you may be pleasantly surprised.
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