According to recent news reports, the current administration is proposing changes to the National Flood Insurance Program (NFIP) that could drastically impact new home construction and some existing homeowners in South Florida. This is an important potential development for homeowners and homebuyers in the region, and one that we will continue to monitor for further developments.
What is the National Flood Insurance Program?
The NFIP is a federal government program administered by the Federal Emergency Management Agency (FEMA) that provides flood insurance to homeowners in flood-prone areas. If you have flood insurance, your insurance policy is probably through the NFIP – even if you purchased coverage from a private insurer.
Is the NFIP the only option for flood insurance in Florida?
No. While most homeowners have flood insurance coverage through the NFIP, legislation enacted in 2014 gives Florida homeowners the option to purchase private flood insurance. However, if you purchased your flood insurance prior to 2014 (and have not made any changes to your policy), or if you did not shop around for flood insurance, you most likely still have NFIP coverage.
What are the proposed changes to the NFIP?
Currently, the White House is asking Congress to consider two major changes to the NFIP. The first would end the program for new construction in flood-prone regions, including many coastal areas of South Florida. While new homebuyers would still have the option to purchase private flood insurance, (i) the lack of NFIP coverage may dissuade builders from pursuing new coastal development projects, and (ii) private insurance in areas where NFIP coverage is no longer available will likely come at a significant premium.
The second potential change would impact existing homeowners. As reported by Bloomberg, the proposed plan, “would give authority to the Federal Emergency Management Agency to cut-off coverage for properties that flood repeatedly.” This means that homeowners who have relied on NFIP coverage for years – or perhaps even decades – could suddenly find themselves uninsured and needing to find coverage in the private market.
What are the chances that these changes will take effect?
Whether the propose changes to the NFIP will take effect remains to be seen. Several organizations, including the National Association of Home Builders, are opposing the legislation, and efforts to curtail NFIP coverage for homeowners have failed previously. However, NFIP premiums have increased significantly in recent years, and Congress is also considering legislation that would make private flood insurance more accessible to homeowners in flood-prone areas.
What else do South Florida homeowners need to know about the NFIP?
If you currently have NFIP flood insurance, it is important to make sure you understand the terms of your policy as well as the alternatives that are available. For more information, we encourage you to read:
- National Flood Insurance is Not the Only Option for Florida Property Owners
- The National Flood Insurance Program (on FEMA.gov)
- Understanding the Deductible for Your Home, Hurricane or Flood Damage Claim
- What Florida Homeowners Need to Know about the National Flood Insurance Program (NFIP)
Contact the Broward County Insurance Claim Lawyers at Saavedra | Goodwin
If you are dealing with a flood insurance claim and need help obtaining coverage under your policy, we encourage you to get in touch. Our attorneys represent home and business owners in insurance claim disputes throughout South Florida. To request an appointment at Saavedra | Goodwin, please call (954) 767-6333 or contact us online today.