Florida is really in a world of it’s own for many reasons, but in the case of flood insurance specifically, it’s a level playing field around the country.
Almost all flood policies today are regulated by the government through the National Flood Insurance Program (NFIP), which is part of FEMA, and you need to go through an agent to buy it.
A few private market flood insurance companies recently started offering an alternative to FEMA’s program, but rates are usually a lot more expensive and it doesn’t make sense for most people. Legislators in Florida are trying to incentivize private companies to come and play ball, but it’s still up in the air.
Two ways to buy flood insurance, is that all?
Since FEMA regulates rates, deciding where to buy flood insurance in Florida is pretty straightforward.
OPTION #1 – One option is to use FEMA’s agent locator tool on their website where you can enter your zip code and find tons of agents all over the country.
OPTION #2 – You can get your own flood quote online through the National Flood Insurance Program. Online quotes will instantly help you find out if your home is in a high risk flood zone by automatically matching your address in FEMA’s mapping system (I have a link at the bottom of this article if you want to try an instant flood quote for yourself).
Why isn’t there more competition?
FEMA has been subsidizing flood rates for years so that home owners in flood prone areas could have access to affordable insurance. This rate suppression has essentially eliminated any competition and kept a lot of private companies away.
In order for flood insurance to be competitive, rates would have to become “actuarially sound”, meaning companies could make enough money to both pay claims and still make a profit. But as long as government subsidies continue, it will be hard for new players to want to enter the market. Especially if they can’t make money.
you get the best rate?
(1) Of course, working with a knowledgeable agent is Step 1.
(2) Make sure you’re getting credit for being in the correct flood zone and find out if you should reclassify your home with a grandfathered policy (more on this in another post).
(3) Try quoting different deductible options. Just be careful because in most cases, raising your deductibles will not provide enough of a discount to make the added risk worthwhile.
For example, you can now elect $10,000 deductibles on your flood policy (the old maximum was $5,000). From what I’ve seen, the savings you get by increasing from $5,000 to $10,000 hasn’t been worthwhile. Just be careful.
I wish more discounts were available, but the fact is, there isn’t a lot of flexibility when it comes to flood insurance. The National Flood Program is still hurting for funds after incurring massive losses from hurricane’s Katrina and Sandy. Now, legislatures are figuring new ways to raise rates through surcharges and other policy changes that are slowly getting approval. Over time, I think we will eventually see private companies enter the market and compete for business, but we still have a long way to go.
Want to check your rate right now?
If you are looking for a flood quote today, then try using the instant online quote tool. click here to get started. It will ask you for basic information and automatically determine your flood zone, then try to deliver a quote for you right online. It’s pretty nifty and integrates directly with the National Flood Insurance Program. If you don’t qualify for an instant quote then submit your email address and I’ll send you a flood zone determination along with instructions on how to finalize your quote.
You could also ask a question below in the comments and I’ll respond with helpful info to guide you in the right direction. Feel free to stay in touch, I’m here to help.