A FLOOD OF QUESTIONS: Tropical Systems Fay, Gustav Spur Floridians’ Interest in Flood Insurance

Rainmakers may be good for business, but they’re bad for homeowners — especially for the two-thirds of Florida homeowners who lack flood insurance.
Flood claims for Tropical Storm Fay — which made a record four Florida landfalls in August — continue to pour in. Fay dropped 27.65 inches of rain near Melbourne, caused canals to overrun their banks in South Florida, flooded neighborhoods in the rural Panhandle and turned drainage ditches in Port St. Lucie into skim-boarding venues for teenagers.
As the calendar advances into September — historically the busiest during hurricane season — now is a good time to remind homeowners and potential buyers that regular homeowner’s insurance policies don’t cover flood damage.
To insure against damage caused by flooding, owners must be covered by policies issued through the National Flood Insurance Program (NFIP), established by Congress.
This is particularly important for homes impacted by “storm surge” — the combination of natural tides plus waves caused by tropical storms and hurricanes. Damage caused by storm surge is considered flood damage and not covered by homeowner’s policies.
Even just a two-inch flood — about halfway up a typical baseboard — could cause up to $7,800 in damage, after considering the cost of new carpets, drywall, baseboards, lamps and furniture. To try a simulation, visit www.floodsmart.gov.
Inland owners also should be mindful of their risks, since tropical storms are known to produce flash floods throughout the state. A Rand Corporation study showed a third of all floods occurred outside standard flood hazard areas; however, only 1 percent of people outside the flood plains buy flood insurance. And, according to the Independent Insurance Agents and Brokers of America, homeowners are 26 times more likely to be affected by a flood than a fire.
In the wake of Fay and Hurricane Gustav, calls to Florida agents about flood insurance increased by about 20 percent — including homeowners asking about buying insurance for the first time as well as policyholders checking on their coverage.
“Tropical Storm Fay has raised awareness,” said Lynne McChristian, a spokesman for the Insurance Information Institute, which represents the industry. In some offices, agents are writing up to four flood policies a day, compared to just one before Fay.
An important caveat: Typically, there is a standard 30-day waiting period before flood coverage takes effect. While signing a policy now won’t protect against flood damage incurred during September, it’s a worthwhile consideration, especially since hurricane season lasts through Nov. 30.
As the sogginess of hurricane season continues, here are other tips to consider:
CHECK YOUR ELIGIBILITY
To qualify, a homeowner must live in a community that participates in the NFIP program. To reciprocate, communities are required to implement floodplain best practices designed to mitigate future losses due to floods. The list of participating Florida communities can be found at this URL: www.fema.gov/cis/FL.pdf. Renters and business owners can also protect their belongings.
KNOW THE LIMITS
Florida consumers can purchase flood insurance for up to $250,000 for property damage and $100,000 for personal contents. While a building and contents policy for the maximum level of coverage in a high flood risk area not on the water may be over $2,000, many low- to moderate-risk areas with the same coverage would cost less than $325.
EVALUATE FLOOD RISKS: It’s possible that your home, even though not in a flood plain when purchased, may be in one now. The Federal Emergency Management Agency has updated flood-plain maps in recent years and areas once considered “safe” now might be in high-risk zones. If you regularly notice standing water near your house after a rainstorm, that may be a signal that your area is at potential risk during a tropical storm or a hurricane. You can go online and check Floodsmart.gov, FEMA’s flood-insurance Web site. Type in your address to determine your property’s flood risk.
Charles J. Kovaleski is president of Attorneys’ Title Insurance Fund, Inc., (The Fund) the leading title insurer in Florida and the sixth largest title insurance company in the country. The Fund has been in business for more than 50 years and supports a network of more than 6,000 attorney agents statewide who practice real estate law. The Fund, based in Orlando, underwrites more than 300,000 title insurance policies for owners and lenders in Florida every year. For more information, visit www.FundHomeInfo.com.