Yes, it can happen here.
What is a flood? Floods are the most common and costly natural disasters that occur in the U.S. The definition of a flood for insurance purposes is a temporary condition where two or more acres of normally dry land or two or more properties are inundated by water. A big misconception is that it's only the homes on or near the beach that get flooded. In reality, nearly 25% of all flood insurance claims come from homes not considered to be in a flood zone! A simple rule of thumb is - if you live in Florida you live in a flood zone! What is also important for you to know is that flood damage is not covered by your homeowners insurance policy.
Let us help you determine what flood zone you are in and how much a flood policy for your home will cost.
When people think of floods they usually think of big events like hurricanes. But floods can be caused tropical rains which we experience all of the time in Southwest Florida. Flooding can happen anywhere, but certain areas are especially prone to serious flooding. To help communities understand their risk, flood maps have been created to show the location of high-risk, moderate-to-low risk and undetermined-risk areas.
National Flood Insurance Program (NFIP) - A typical homeowners insurance policy specifically excludes damage caused by flood. To provide property owners with a means to protect themselves, in 1968 Congress created the National Flood Insurance Program. FEMA offers flood insurance to homeowners, renters, and business owners if their community participates in the NFIP - Naples, Marco Island, Collier and Lee county all do.
To be eligible, a community must adopt and enforce floodplain management ordinances and minimum standards for new and substantially remodeled construction that meet or exceed FEMA requirements to reduce the risk of flooding. Owners of existing homes and businesses were not required to rebuild to the higher standards, and in fact many received subsidized rates that did not reflect their true risk of flooding.
The NFIP is administered by FEMA, the Federal Emergency Management Agency, which works with private insurance companies to offer flood insurance to property owners and renters. Flood insurance can be purchased through property and casualty insurance agents like us. The rates depend on many factors including the age, type of construction of the home and most importantly the elevation of the lowest floor of the home.
Congress has mandated that any home with a mortgage backed by a federal agency, like Fanny Mae and Freddy Mac, must carry flood insurance if the home is located in a high-risk area (zones A, AE, AH or VE). Homes and business in moderate-to-low risk areas (zones B, C, or X) are not required to have flood insurance, but they should. 25% of all flood claims are paid to properties not in a "high-risk" flood zone. A lender can require a mortgagee to purchase flood insurance even if it is not federally required. Bottom line, if you live in Florida, you live in a flood zone and you should have flood insurance.
Flood Maps - the Federal Emergency Management Association (FEMA) uses statistical data to create flood hazard maps that outline a communities different flood risk areas, called zones. In 2003 Congress mandated that FEMA update their flood maps to a digital mapping system, DFIRMS (Digital Flood Insurance MapS), which are more accurate and easier to maintain.
Flood Damage/Insurance - Flood insurance policies cover physical damage to your property and possessions caused by a flood. Just a few inches of water can cause tens of thousands of dollars in damage. The average residential flood claim paid by FEMA in Florida in 2013 was $22,595 - without a single hurricane making landfall. Flood insurance is a cost effective way to protect your property from a devastating financial loss. Cost vary depending on how much insurance is purchased, what it covers, and the property's flood zone.
Preferred Risk Policy - Most homeowners in moderate-to-low risk areas are eligible for coverage at a preferred rate. Homes and businesses may qualify for the low-cost Preferred Risk Policy.
High-Risk Policy - If your property is located in a high-risk area, zones starting with "A" or "V", and you have a federally insured mortgage you will be required to purchase flood insurance. There is at least a 1 in 4 chance of flooding during a 30-year mortgage for properties in high risk areas. A standard rated policy offers separate building and contents coverage. Standard rated flood insurance premiums are calculated based on factors like year of construction, building occupancy, number of floors, location of contents, flood zone, your lowest floor elevation, and the deductible you choose.
30 Day Waiting Period - Typically there is a 30 day waiting period from the date of purchase before your flood policy goes into effect with a few exceptions. If you are taking out, increasing, or extending your loan; you are purchasing flood insurance with the 13 month period following a map revision; your lender determines that flood insurance is required where it hadn't been required before; or an additional amount of insurance is being purchased at renewal then the 30 day waiting period will be waived.
Elevation Certificates - An elevation certificate is a form signed by a licensed engineer or surveyor that verifies the elevation of the lowest floor of your property relative to the natural ground. The Base Flood Elevation (BFE) is the elevation where there is a 1% or greater annual chance of flooding. Generally, the higher your lowest floor elevation is above the base flood elevation, the lower your flood risk, so your flood insurance will cost less. You will need to have an elevation certificate in order to get a flood insurance quote. The NFIP requires communities to maintain a record of elevation certificates to document their compliance with the communities floodplain management plan.
If you would like to discuss your flood insurance questions, please give us a call. For more information you can visit FEMA, NFIP, and the flood page of the Collier County Government web site.
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