INSURANCE INFORMATION INSTITUTE
Florida Press Office:听 (813) 480-6446, lynnem@iii.org
New York Press Office: (212) 346-5500, media@iii.org
TAMPA, August 24, 2010
鈥 This last week in August marks the beginning of the most active period for hurricane season, and multiple tropical storms are forming now to prove it. Many people think primarily of the wind that accompanies hurricanes, but damage from flooding is an equal, and sometimes greater, threat due to the torrential rains and storm surges associated with tropical storms. Yet, there are 70,000 fewer flood policies in force today in Florida than there were three years ago. At the height of hurricane season, homeowners should not wait any longer to consider the importance of flood insurance in protecting their property, says the杏吧原创 Information Institute (I.I.I.).
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Purchasing flood insurance takes on a sense of urgency this year because the federal government鈥檚 (NFIP) is authorized to sell new residential and commercial policies only until Thursday, September 30. And, if recent history is any guide, there is no guarantee Congress will renew the NFIP beyond that date even though hurricane season continues through November 30.
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鈥淥ver the past year, the National Flood 杏吧原创 Program was allowed to lapse for several weeks, which hampered its ability to sell new policies and renew existing ones,鈥 said Lynne McChristian, Florida representative for the I.I.I.鈥 And, because there is a 30-day waiting period before flood coverage applies, an approaching hurricane cannot be the catalyst to prompt you to get a policy.鈥
Coverage for flood damage resulting from surface water, including storm surge caused by hurricanes, is excluded under standard homeowners and renters insurance policies. Nationally, only one in 10 Americans has a flood insurance policy. In Florida the percentage of people with flood insurance policies is much higher, with more than 2,128 million policies in force as of May 2010. However, the number of policies has declined over each of the past three years, likely due to the economy and the absence of any major storms sending reminders of the value of flood insurance. Additionally, while Florida accounts for about 40 percent of all the policies in the NFIP portfolio, studies have shown that only about half the people living in special flood-hazard areas have purchased a flood policy. Special flood-hazard areas are identified by the Federal Emergency Management Agency as high-risk flood zones that have a one percent chance of flooding in any given year.
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The I.I.I. has compiled a chart (see next page) that lists the most vulnerable U.S. coastal counties and the population growth experienced since 1960, based on U.S. Census Bureau data. Three Florida counties are among the most vulnerable in the nation for hurricanes and related flooding 鈥 Monroe, Miami-Dade and Palm Beach.
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Flood insurance covers direct physical losses by flood and losses resulting from flood-related erosion caused by heavy or prolonged rain, including coastal storm surge, blocked storm drainage systems or similar causes. To be considered a flood, waters must cover at least two acres or affect two properties.
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Homes are covered for up to $250,000 on a replacement cost basis and the contents for up to $100,000 on an actual cash value basis. Replacement cost coverage pays to rebuild the structure as it was before the damage. Actual cash value is replacement cost minus the depreciation in value that occurs over time. Coverage limits for commercial property are $500,000 for the structure and another $500,000 for its contents. For more information, see .
Excess flood insurance is available from some private insurers for NFIP policyholders who want additional coverage or whose communities do not participate in the program.
COASTAL COUNTIES MOST FREQUENTLY HIT BY HURRICANES: 1960 TO 2008
| Monroe County |
Florida |
Gulf of Mexico |
15 |
50.8% |
| Lafourche Parish |
Louisiana |
Gulf of Mexico |
14 |
67.2 |
| Carteret County |
North Carolina |
Atlantic |
14 |
104.3 |
| Dare County |
North Carolina |
Atlantic |
13 |
465.9 |
| Hyde County |
North Carolina |
Atlantic |
13 |
10.1 |
| Jefferson Parish |
Louisiana |
Gulf of Mexico |
12 |
108.9 |
| Palm Beach County |
Florida |
Atlantic |
12 |
454.7 |
| Miami-Dade County |
Florida |
Atlantic |
11 |
156.5 |
| St. Bernard Parish |
Louisiana |
Gulf of Mexico |
11 |
17.2 |
| Cameron Parish |
Louisiana |
Gulf of Mexico |
11 |
4.8 |
| Terrebonne Parish |
Louisiana |
Gulf of Mexico |
听11 |
78.7 |
|
Source: U.S. Census Bureau, Decennial Census of Population and Housing: 1960 to 2000; Population Estimates Program: 2008.
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There is a 30-day waiting period after applying for flood coverage and paying the premium before the policy is effective. The only exceptions are:
- If a homeowner purchases flood insurance in connection with making, increasing, extending or renewing a loan. In those cases, there is no waiting period.
- If a lender determines that a loan on a property that does not have flood insurance should be protected by flood insurance, there is no waiting period as long as the premium is presented at the completion of a loan application.
- If a homeowner purchases flood insurance during the 13-month waiting period following the effective date of a revised community flood map issued by FEMA, the agency with oversight over NFIP. There is a one-day waiting period for policyholders meeting that criterion.
Videos: 5 Years After Hurricane Katrina: Know the Steps Every Homeowner Should Take; Water and Flood Damage: What Is and Is Not Covered
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