Florida’s Private Flood Insurance Market is Growing

But it still represents only a small fraction of government-backed residential and commercial policies.
February 25, 2020

Florida currently has nearly 83,000 private flood insurance policies as of September 2019, says the Florida Office of Insurance Regulation. They represent a small fraction of the 1.76 million government-backed residential and commercial policies that the Insurance Information Institute says were in force in Florida in 2018. But the private market is growing.

Compared with coverage under the National Flood Insurance Program (NFIP), private insurers tend to have significantly higher caps to allow homeowners to cover the full cost of their home. Some homeowners with NFIP coverage obtain supplemental private flood policies, which totaled 6,239 in Florida of September 2019, state regulators say.

In the federal model, a home’s flood risk is determined by its “flood zone,” while on the private market, flood risk is determined on an individual property basis. The private flood insurance market’s more precise ratings may result in lower rates, but could also work the opposite way, resulting in higher rates. –more

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