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How To Navigate The Latest Citizens Insurance Flood Insurance Coverage Rule

Flood insurance coverage is now a necessity for anyone with Citizens Insurance. Aiming to stabilize the property insurance market in Florida, the Florida Legislature approved a game-changing plan in December. These changes involve new flood insurance requirements for Citizens’ personal residential policies, which officially came into effect on April 1, 2023. Learning about these changes can help you navigate the complexities of this new requirement.

Understanding the New Flood Insurance Coverage Rule
The rule stipulates that Citizens’ policyholders with a Personal Lines residential policy must now secure flood insurance coverage. This rule is specifically for properties located within the Federal Emergency Management Agency’s (FEMA) Special Flood Hazard Area (SFHA). The driving force behind this reform is to offer policyholders protection from potentially expensive out-of-pocket repair costs resulting from flood damage. 

These requirements are also part of a broader reform package designed to shield the Florida property insurance market from the onslaught of high litigation costs and rising premiums that have impacted the market over the past few years. An insurance agency can help you navigate these changes to make sure you are meeting these requirements. You can also drop by a local office if you have questions or need to make additional changes to your policy.

Who is Affected by the Rule and When?
The timing and impact of these new flood insurance requirements vary based on a policyholder’s current insurance plan and the value of their insured property. If you are a new Personal Lines residential policyholder seeking Citizens coverage for a property in an SFHA, the requirement to have flood insurance became effective from April 1, 2023. 

However, existing policyholders with properties in these hazard areas, whose policies include wind coverage, will need to secure flood insurance to renew their Citizens policies from July 1, 2023, onwards. These changes are designed to provide greater protection against the potential of flooding in high-risk areas.

The rules will be phased in over four years for all other Personal Lines residential insurance policies that include coverage for wind, as follows:

  • Policies insuring property valued at $600,000 or more will require flood insurance from January 1, 2024.
  • Policies insuring property valued at $500,000 or more will require flood insurance from January 1, 2025.
  • Policies insuring property valued at $400,000 or more will require flood insurance from January 1, 2026.
  • All other policies will require flood insurance from January 1, 2027.

Flood Insurance Policies: What You Need to Know
Citizens itself does not provide flood insurance. Additionally, flood coverage is not part of standard multiperil policies. Consequently, homeowners will need to obtain a separate flood insurance policy. It’s also important to note that properties located in flood zones that have federally backed mortgages typically need flood insurance.

Only about 18% of Florida homeowners had flood insurance in 2022. However, the percentage was significantly higher in the coastal regions, especially in those counties most impacted by Hurricane Ian in September 2022. In these regions, over half of the policyholders had flood insurance.

Opting Out of Flood Insurance: What Are the Alternatives?
Choosing not to buy flood insurance has its consequences. The most immediate one is that you will no longer be eligible for a Citizens Personal Lines residential policy. However, this doesn’t leave you without options. You can explore alternatives in the private insurance market. Some of these private policies may even offer more comprehensive coverage at similar or competitive prices.

However, it’s crucial to remember that Citizens’ policyholders are potentially subject to an assessment of up to 45% of their premium following a significant storm or a series of storms. This is a key factor to consider while comparing Citizens’ coverage with private insurance options.

Strategically Navigating the Changes
These flood insurance requirements signify a critical shift in the insurance landscape in Florida. While these changes may initially appear daunting, a clear understanding, strategic planning, and early action can help homeowners navigate these changes successfully.

Your insurance agent can provide invaluable guidance during this transition, helping you understand the new requirements, exploring alternative options if necessary, and ensuring that you have the appropriate protection for your home.

The newly introduced flood insurance coverage rule is a pivotal change in the Florida property insurance market. Staying informed and proactive can smooth the transition, helping you turn these changes into opportunities for securing better, more comprehensive protection for your home.

Need to find Flood Insurance? Give Wellcovered Insurance a Call!
At Wellcovered Insurance, our mission is to guide you through all of the details of flood insurance to ensure that you are well-protected. Our insurance team is focused on helping you find the ideal coverage that aligns with your unique needs. 

Along with flood insurance, we also provide a diverse range of other insurance services, including home, auto, general liability, and commercial property insurance, among others.

Our guiding principles at Wellcovered Insurance include a commitment to providing helpful insights, maintaining open lines of communication, proactively addressing concerns, pinpointing potential issues, and always seeking solutions. We are always available to answer any of your questions and clarify any doubts you might have about insurance.

You can also visit our local office in Orange City at any time if you wish to discuss changes to your policy or need personalized advice. Don’t hesitate to reach out to Wellcovered Insurance to explore our broad range of insurance options!