02 Oct AS IS THE CASE IN THE CAROLINA’S, MAJORITY OF MIAMI HOMEOWNERS DO NOT HAVE FLOOD INSURANCE
October 2, 2018 — As millions of Americans in the Carolina’s are combating unprecedented flooding, they are facing the harsh reality that, due to a lack of flood insurance, the financial burden will be entirely on them. It’s estimated that less than 10% of homeowners in North Carolina have flood insurance. Flooding is typically not covered in traditional insurance policies, and largely must be purchased separately from the National Flood Insurance Program (NFIP). Established by the federal government in 1968, an average policy costs $707/year, while premiums on high-risk properties can be as much as $5,000/year or more, which is why many homeowners choose to go without it.
More than two weeks since hurricane Florence made land fall, rivers are just now starting to crest. This silent assassin, as it’s being referred to because of its delayed impact, is swallowing up homes and communities, causing an estimated $20 billion in damages.
WHO NEEDS FLOOD INSURANCE?
Flood insurance through the NFIP is available to communities who have agreed to adopt and enforce floodplain management ordinances aimed at reducing future flood risks. Properties that are in high-risk areas are generally required by their mortgage lender to purchase flood insurance, but it’s not only high-risk areas that flood.
In Miami, and South Florida as a whole, it doesn’t take a hurricane for flooding to occur. Massive rains, king tides, and sea-level rise in general has made the risk of water damage more prevalent than ever before. One would think that Miami homeowners, who regularly see this flooding for themselves, would be apt to ensure they have the proper coverage in place. But just as in North Carolina, this is not the case. Even though Florida has more policies than any other state, in Miami Dade, there are currently only 316,350 policies in force, representing just fraction of all properties. It would be expected that the amount of insured homes would be going up year-over-year due to the increased effect of climate change, but this also is not the case – coverage has dropped 16% in Florida alone since the rate increases in 2012.
In addition to the expense of the policies, the lack of homes covered can also be blamed on confusing flood maps. Because general property insurers do not typically sell flood insurance, if a mortgage lender does not require it, many homeowners are never told they need it. What worse, even those who do look into the risks may find that the maps can be misleading, out of date, or even incorrect.
According to Roy Wright, who oversees the Federal Emergency Management Agency’s National Flood Insurance Program, if you’re a homeowner in Florida relying on flood zone maps to decide whether to buy insurance, check your driver license instead.
“If it says Florida, you need flood insurance,” said Wright. “It may be more helpful than trying to find the right map.”
IT’S UP TO HOMEOWNERS TO BE PREPARED:
Floridians, especially those of us in Miami, cannot rely on our local governments to ensure we are protected. We cannot rely on developers who are still consistently building in high-risk areas, and don’t expect FEMA to come along with handouts to cover losses. We know the risks and, fortunately, there’s a way to mitigate them. By the time the water comes, it will be too late. For those in Miami who are currently uninsured, hopefully they will be influenced by what the Carolina’s are currently going through, what happened during Harvey in Texas, and the devastation we saw last year in the Florida Keys. For most homeowners, it is their single largest asset. It would be a shame to see all that money go down the drain.
- For more information about the costs associated with flood insurance, check out this article by Melissa Horton from LendEDU: https://lendedu.com/blog/average-cost-of-flood-insurance/