Flood damage stands as the most prevalent natural disaster in the U.S. and among the most expensive. Florida, being highly susceptible, saw only about 18% of homeowners with flood insurance in 2022 – just two years ago. This figure is expected to rise since Citizens Property Insurance mandated flood insurance for policyholders in special flood hazard areas starting in April of the same year. (photo credit WUSF)

Citizens plans to require flood insurance for all its policies by 2027, and is already doing so this year – 2024 – with homes valued at $600,000 or more. This means anyone with a Citizens policy up for renewal with a property valued at $600k or more will be required to buy flood insurance. Although, this requirement will apply to all policyholders in just over two years.

Currently, Citizens Insurance is Florida’s largest insurer and is demanding that all homeowners filing claims for damage caused by Hurricane Helene provide proof of post-storm repairs. A move that could potentially lead to policy cancellations for those unable to provide adequate proof of repairs, even for homeowners who believe they’ve done everything by the book.

When Does Citizens Require Flood Insurance?

Starting in April of 2023, Citizens Insurance required all new policyholders in designated special flood hazard areas to buy separate flood insurance. Here’s the rollout schedule for other policies that’s already going into effect:

• Jan. 1, 2024: Policies insuring properties worth $600,000 or more.
• Jan. 1, 2025: Policies insuring properties worth $500,000 or more.
• Jan. 1, 2026: Policies insuring properties worth $400,000 or more.
• Jan. 1, 2027: All other policies.

This phased approach initially focused on flood zone residents needing insurance last year. Now, in 2024, both new and renewal policyholders must have flood insurance. By 2027, all policyholders, irrespective of location, will need flood insurance.

Insurance Costs and Choices

Citizens policyholders currently pay 30-40% less than those with private insurers, even with added flood insurance. However, as costs rise, some residents are skipping home insurance altogether. Yet, Florida offers the most options, with numerous insurance companies providing flood coverage, allowing consumers to compare.

State Intervention

Following Hurricane Ian, state lawmakers acted during the December 2022 special session on property insurance. Citizens’ spokesperson highlighted that homes, especially in Central Florida, flooded despite not being in flood zones.

According to FEMA, Special Flood Hazard Areas (SFHA) are regions prone to floods, mudflow, or flood-related erosion hazards, including various flood zones like A, AO, A1-A30, AE, and more (including A99, AH, AR, AR/A, AR/AE, AR/AH, AR/AO, AR/A1-A30, V1-V30, VE, or V). These areas must adhere to the National Flood Insurance Program’s regulations and often require flood insurance.

Is Flood Insurance Mandatory in Florida?

While not state-mandated, flood insurance is typically required by federally-backed mortgage companies. Regardless, Citizens’ website states, “By January 1, 2027, most Citizens’ personal residential policies that include wind coverage will be required to have and maintain flood insurance coverage under a phased in approach created by the Florida Legislature in December 2022.”

Checking Flood Zone Status

To see if your home is in an SFHA, visit FEMA’s Map Service Center, enter your address, and view the interactive map with flood zones indicated. You can find the tool right here: https://msc.fema.gov/portal/home

Why Is Citizens Mandating Flood Insurance?

Citizens’ new requirements are part of a reform package aimed at stabilizing Florida’s volatile insurance market. The new rules target policyholders with Personal Lines residential policies.

In June of this year, Citizens Insurance sought a major rate increase. The Board of Governors for the Insurance Corporation green-lit the request, granting the insurer an average 14% rate increase. Additionally, the Board likewise implemented a new requirement that mandates all policyholders with Citizens Insurance to carry flood coverage.

These changes mean customers could face substantial additional costs, potentially adding hundreds of dollars or more to their existing premiums.