The Biggert-Waters Flood Insurance Reform Act of 2012 instituted reforms to the National Flood Insurance Program (NFIP), designed to occur over a five-year period. One of the Act’s many changes involved a phase-out of certain subsidies, which substantially increased the premiums that many property owners pay for coverage.
Considering that about 37 percent of all NFIP policies are held by Florida property owners, according to the Miami Herald, the Florida legislature enacted a new bill that expanded flood insurance options for state policyholders, including the ability to purchase policies from private carriers.
Four Policy Options Create Choices for Property Owners
Before the Florida bill, your only choice with national flood insurance involved deciding whether to purchase a policy or face the risk of total loss without coverage.
Now you need to look at the individual risks to decide how much coverage you want to pay for. While any reforms are required to meet national standards, Florida Statute §627.715 offers four options to provide more control over the coverage you choose, as follows:
• Standard: These policies provide equivalent coverage to that provided by the National Flood Insurance Program, subject to the same deductibles and other provisions.
• Preferred: In addition to Standard policy coverage, these policies broaden the definition of flood, include living expense coverage, and they base repair or replacement coverage for property on replacement cost, which is more generous than actual cost.
• Customized: Property owners also have the option of choosing individual coverage options — as long as their policies continue to meet the provisions of standard coverage.
• Supplemental: Whether you want to stick with a National Flood Insurance Program policy or purchase a Standard, Preferred or Customized private policy, you now can purchase a policy to cover items or risks that are not covered under the base policy. For example, this might be important if you own valuable jewelry, antiques or artwork, which are typically excluded from coverage.
The New Options Do Not Guarantee an Easier Claims Process
Our Fort Lauderdale property damage attorneys applaud any legislation that has the potential to create a more flexible system for property owners who need to make sure their property is appropriately protected.
Even though only a handful of insurance carriers currently provide flood insurance, we believe that property owners who are willing to educate themselves on their new options have a better opportunity to strike the best balance between premiums and coverage.
Still, if you experience water damage to your property, there remains a good chance that complex issues, such as whether your damage is covered by your flood policy or homeowner’s policy, can still result in reduction or denial of your claim by your insurance company.
Presentation of water claims to the correct insurer is often complex, requiring support from a skilled property insurance claims lawyer who is dedicated to protecting your rights. Call us at (954) 928-9568 or use our convenient online contact form to learn how we can help.
