Insurance Commissioner Urges Floridians to Buy Flood Insurance

May 15, 2006

Florida Insurance Commissioner Kevin McCarty has urged Floridians to purchase flood insurance to protect their homes. McCarty’s warning comes on the eve of the 2006 hurricane season which officially begins June 1.

“One of the many tragedies of Hurricane Katrina,” McCarty notes, “was that many people were unaware that flood damage is not covered by their homeowners policies. Buying flood insurance is easy, affordable, and provides an extra layer of security in the event of a catastrophic event.”

This fact became critical during the aftermath of Hurricane Katrina as up to 80 percent of properties damaged in Mississippi, and 60 percent of properties in low-lying New Orleans did not have flood coverage.

“I am pleased to report that in Florida nearly 34 percent of Florida’s homes do have flood insurance, but that still leaves two-thirds of families without this coverage. Even people outside of the flood zones need this coverage,” McCarty adds.

A recent Rand Corporation study showed that one-third of all floods occurred outside standard flood hazard areas; however, only one percent of people outside the flood plains buy insurance. Commissioner McCarty has been a long-standing advocate of updating outdated flood zone maps used by the National Flood Insurance Program administered by the Federal Emergency Management Agency.

Congress is attempting to address this problem, and has passed several bills including a provision that appropriated $750 million for flood map modernization, as well as provisions that raised the coverage limits, and increased FEMA’s borrowing authority. With the new legislation, Florida consumers would be able to purchase flood insurance for up to $335,000 in property damage, and $135,000 for personal contents. Most flood insurance policies average less than $450 a year in the flood zone and less than $300 a year outside the flood zone.

Source: Florida Office of Insurance Regulation

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