Florida to Make a Major Change for Homeowners. Will You be Affected?

Photo byPhoto by: Coast Guard News

Do you have flood insurance?

The Florida state Legislature approved on Wednesday a bill requiring hundreds of thousands of Florida property owners to buy flood insurance. It is the nation’s first mandate of its sort.

Regardless of whether a property is located in a high-risk flood zone, the rule is applicable to all homes in the state and will cost some homeowners thousands of dollars] a year.

The requirement could protect people whose homes are damaged by storms from financial ruin because flood coverage is typically not included in standard homeowners' insurance policies.

The bill that was approved two months after Hurricane Ian caused catastrophic damage in areas of Florida where almost no one has flood coverage.

“It’s probably a good idea to mandate people to have flood insurance,” said Paul Handerhan, president of the Florida-based Federal Association for Insurance Reform, a consumer advocacy nonprofit. “It seems like that’s the only mechanism that really drives adoption.”

Federal law mandates the owner buy flood insurance if a home is protected by a federally-backed mortgage and is located inside a flood zone.

Florida is the nation’s most flood-prone state. About 19% of households here have flood insurance, the second highest rate in the U.S. after Louisiana.

The Florida Legislature enacted a comprehensive measure that included the demand for flood insurance to revive the state’s collapsing insurance sector.

The bill also includes provisions long sought by the insurance industry to minimize losses, that is, discouraging policyholders from filing lawsuits to challenge settlement offers they find insufficient.

“This is landmark legislation for Florida,” said Mark Friedlander, spokesperson for the Insurance Information Institute.

This year, dozens of local insurers have gone bankrupt or ceased covering property damage amid rising losses.

What do you think about the flood-insurance mandate?

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