Mortgage Blog

Florida Flood Insurance

Florida residents are often plagued with tropical storms and hurricanes. Several areas of Florida fall into areas known as flood zones, meaning that lenders will require homeowner’s to carry flood insurance.  In May of 2012, the flood zones were redrawn which resulted in some homes who never needed flood insurance needing them. The upside is many properties previously located in flood areas were also removed from the flood zones.

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Why you need flood insurance

Keep in mind that it is nearly impossible to determine whether your home and its contents will be damaged in a storm. The flood insurance program is set up to help homeowners deal with the losses that can occur when water enters their home. Flood insurance does not cover everything, but can help defray some of the costs involved. Many people believe that their homeowner’s policy will cover damage from floods, this is a dangerous assumption.

What Florida flood insurance covers

There are two levels of flood insurance, one for personal property and one for building property.  It is important to understand what coverage is offered under both.

Building property coverage includes replacement of appliances damaged by flood. This includes central air conditioning systems, furnaces, water heaters as well as kitchen appliances. This coverage basically covers anything in the “insured building” including the foundation. It may also include garages though it will not include sheds unless a separate property policy is obtained.  In effect, building property coverage will help replace any non-personal property, that is anything that is damaged that “belongs” in the home.  This coverage also includes removal of debris from your home.

Personal property coverage is what you will need to cover items such as clothing, furnishings and other fixtures such as air conditioners you use in windows, computers, televisions, etc. Other items include your refrigerator, the food in the refrigerator and optional policies for high-end goods such as furs, artwork and antiques.

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How much coverage

The “cap” on flood insurance is $250,000.  Remember that while this may seem high, your actual costs may be much higher, depending on the severity of the storm.  If your home is completely destroyed, your mortgage lender may receive the entire “building” property portion of the insurance payment to compensate them for their loss of mortgage payments.

When you are buying a home, your lender will require you to have a flood insurance policy for the building. The total cost is very reasonable, and can save you thousands of dollars. Every home will require an elevation certificate to determine whether or not your home is in a FEMA designated flood zone.  Make sure that you know the facts about flood insurance and what is covered. You can learn more about flood insurance by reading the guides offered on the FEMA website at : http://www.fema.gov/library/viewRecord.do?id=3011

Disclaimer: This article is for informational purposes only. We are not licensed insurance agents and only give our opinion. Please contact your insurance agent for property specific questions. NMLS #1743702

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