How the New Flood Insurance Changes in 2022 Affect You

flood insurance Miami Dade

Don’t be surprised if you see your premium for flood insurance in Miami Dade County increase next year substantially. Federal Emergency Management Agency (FEMA) is all set to launch Risk Rating 2.0 by April 2022.

The latest policy change seeks to take the financial burden off those with low-value properties and put it on high-value property owners. It also seeks to consider the rising threats of hurricanes and sea-level rise that are already causing much financial loss to the government.

The new rating will consider the following factors to determine the new flood insurance payable from the next year:

  • History of storm surges in the area
  • Total cost to repair/rebuild the damaged property
  • Elevation of the property
  • Probability of inland flooding
  • Other losses happened in the region in the past
  • Natural factors that could facilitate/deter damages due to flooding/hurricanes/etc.

As many as 450,000 policyholders in the region will see their policy value increase by next year. An estimated 125,000 policyholders may also benefit from it since their flood insurance premium will drop to some extent.

What This Could Mean for You

Flood insurance has been a very important policy for the people of Miami-Dade County and almost all of Florida. Since the entire state is a flood-risk zone, everyone has to have this policy for their own financial safety.

As a resident of the region, you could be affected in one of the following ways:

  • New flood insurance policy buyers will have to pay a much higher premium than the existing policyholders
  • Most existing policyholders will not have to pay any more than the annual insurance premium price rise

In financial terms, most people wouldn’t notice a too steep hike in their flood insurance premiums if they already held one. The new policy buyers, though, may be affected a lot by the change.

So, if you haven’t bought flood insurance yet, or if you are going to buy a new property in Miami-Dade County soon, you must buy one immediately.

Is Flood Insurance Worth It?

You must not think twice before buying flood insurance in Florida. While it is not mandatory for all to buy it, having flood insurance saves you from a huge financial risk. If you are planning to buy a property on mortgage, your mortgage company/bank will ask you to buy this insurance first before they finance your property. The risk of flooding is huge in the state, so insurance is the only coverage that can protect you from it.

As many as 20% or more of flood insurance claims in Florida are filed by people who live in low-risk flood zones, and because they had flood insurance. Those who didn’t have had to incur losses running into thousands of dollars for a single inch of flooding. If you don’t want to get stuck in there, look for the best flood insurance in Miami Dade County today.

Plans You can Go For

  • National Flood Insurance Program (NFIP): A federal plan that has been in effect since 1968 has been a lifesaver for many. However, with private players stepping in, NFIP plans seem to be losing the race, since:
    • They have a limited cap for coverage available for property damage and loss of items
    • NFIP policy does not cover several important areas
    • The policy benefits are available only after 30 days of buying the plan
    • No alternate accommodation charges are provided
  • Private Flood Insurance: There are many private players that offer customized flood insurance plans in the Miami Dade region. A few of these plans offer much higher coverage, with a shorter kick-in period and coverage of additional areas around the property. Go through these plans to choose the best one for you.

Speak to your nearest flood insurance company in Miami Dade and get a free quote today.