Hurricane season is here, and unfortunately, the latest predictions are for an intense several months. According to the president of the Weather Research Center, “(t)he west coast of Florida, and Texas coastal areas, have the highest risk of being impacted this year.” Don’t breathe a sigh of relief yet. She went on to predict between 7 and 10 named tropical cyclones will form in the Atlantic this season, with 4 strengthening into hurricanes.
Along with everyone else, the Miami insurance claim attorneys at Saavedra Goodwin have their fingers crossed for another quiet season with no storms making landfall, although the forecast gives cause for concern. At the same time, the Federal Emergency Management Agency (FEMA) has announced that flood insurance premiums will increase.
You Must Purchase Flood Insurance
It is imperative that if you have not already done so, you purchase flood insurance through the National Flood Insurance Program (NFIP). The NFIP is a program run by FEMA, aimed at reducing the impact of flooding on public structures and private property. This is accomplished through various measures, including by providing affordable flood insurance to property owners.
If you haven’t yet purchased or renewed your existing coverage, you should know that as of April 1, 2015, most flood insurance premiums increased as part of the ongoing effort to try to erase the $24 billion in debt which was incurred due to major recent weather events, most notably Hurricane Sandy and Hurricane Katrina.
How Much Will the Increase Affect You?
According to FEMA, the average person will face a 9% increase in their flood insurance premium, not including fees or surcharges. However, some will face much larger increases than others.
For properties that are grandfathered in because they were built before the first flood zone maps were created, which was in the 1980’s, premiums will increase by 25%. If it is a primary home that is grandfathered in, however, the premium hike is 18%, not 25%.
For policies issued to those located in moderate to low risk flood zones, known as preferred-risk policies, rates will rise by up to 15%. It remains to be seen if some of these holders drop their flood insurance in response, since preferred risk policyholders are not required as a condition of their mortgage to carry flood insurance, will see premiums rise by up to 15 percent.
There is also a new annual surcharge on all policies, which range in amount from $25 to $250 per year, depending on the type of occupancy you have to the insured property (for example, if the insured property is your primary home, the annual surcharge is $25, but if it is a vacation home or condo, the annual surcharge is now $250).
The Maximum Deductible Was Also Raised
The maximum deductible was also increased to $10,000 for a flood insurance policy for a single family home, as well as a two-to-four family dwelling. The deductible must be applied to the building and its contents. Choosing the maximum deductible for a single family home will result in up to a 40% discount in base premium. However, using the maximum deductible is not always proper, and may not be allowed by your lender.
If you are in the Miami area and have questions or concerns related to your flood insurance policy, do not delay; the season is upon us! Call our property damage lawyers at (954) 767-6333 or use our convenient online contact form to set up an initial consultation.