Flood Insurance Scope of Coverage and Why This Matters to You

flood insurance Miami FL

Whether you believe it or not, every household in Miami FL is indeed at some degree of flood risk. This is further proven by the fact that as much as 20% of the claims that NFIP received last year were filed by people who don’t live in high-risk flood areas. So, regardless of where you live in the state, you can’t get much protection from flooding without good flood insurance in Miami FL.

National Flood Insurance Program

National Flood Insurance Program (NFIP) was the first program of its kind that was introduced to cover flood losses incurred by the people of the state. Launched by Federal Emergency Management Agency (FEMA), NFIP provides financial cover for the following:

Cover for Building, including:

  • Structure of the building along with its foundation
  • Immovable electrical appliances like refrigerators, dishwashers, and stoves
  • Window blinds
  • Air conditioning and heating equipment
  • Electrical and plumbing systems
  • Permanently installed carpeting

Cover for Personal Belongings, including:

  • Clothes, electronic items, furniture, etc.
  • Food as well as the freezers used for storing them
  • Portable electrical appliances
  • Movable carpets

For a long time, NFIP was the only option available in Florida. However, many private flood insurance companies have come up today. These companies provide similar coverage to NFIP, with the additional benefits of certain flexibilities, such as:

  • NFIP has a 30-day waiting period before the policy benefits go into effect. This means you cannot claim for losses caused within 30 days of buying the policy. In comparison, private insurers allow you to file for claim against policies that were issued 15 days ago or before. These terms can vary for different private flood insurance companies.
  • NFIP does not allow you to get coverage benefits for what’s not covered within your building. So, you won’t get flood insurance benefits for the patio area, garage, or even vehicles parked outside. Private flood insurance companies can offer you the provision to include any area or vehicles in your existing policy, by paying a bit of a higher annual premium.
  • NFIP flood insurance coverage is limited to $250,000 for building damage and $100,000 for damage to personal items. Private flood insurers, in comparison, offer a collective coverage limit of up to $1,000,000, and possibly even more. It must be noted here that the more coverage you seek, the higher your annual premium value can be.
  • NFIP does not provide compensation for alternative accommodation you seek while your house’s being repaired after getting damaged in a flood. A private flood insurance company, on the other hand, may or may not provide cover for such accommodation, depending upon your policy benefits and add-ons.
  • NFIP is a federal insurance program, and so is mostly funded by the government. While this makes it more safe, it also limits its coverage potential. Private insurance plans, on the other hand, are based on the premiums you pay on them. They are a bit more risky than NFIP, but their coverage benefits are much higher too.
  • Once issued, NFIP cannot be canceled. Private flood insurance companies can offer you the option to cancel your policy at your convenience in the future. Not all private companies offer this benefit, though, since it’s only offered at their discretion.

Flooding risk is omnipresent all across Florida. This is why many mortgage companies also ask you to buy flood insurance first before they finance your new property. These mortgage companies as just as threatened by flooding as you, so they make this requirement a prerequisite for the protection of both your and their interests.

Speak to your nearest company offering flood insurance in Miami FL today to know more.