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Flood Damage Vs. Water Damage
There basically are two insurance policies that deal with a homeowner's damage due to water - a flood insurance policy and a homeowners insurance policy.

A homeowners insurance policy doesn't provide coverage for flood damage, but it does provide coverage for many types of water damage to your home. Just the opposite from flood damage.
A few examples of water damage include:
A hailstorm smashes your window, permitting hail or rain free access into your home.
A heavy rain soaks through the roof, allowing water to drip through your attic or ceiling.
A broken water pipe spews water into your home.
A standard flood insurance policy, which is written by the National Flood Insurance Program, provides coverage up to the policy limit for damage caused by flood. The dictionary defines "flood" as a rising and overflowing of a body of water onto normally dry land. For insurance purposes, the word "rising" in this definition is the key to distinguishing flood damage from water damage. Generally, damage caused by water that has been on the ground at some point before damaging your home is considered to be flood damage.
A handful of examples of flood damage include:
A nearby river overflows its banks and washes into your home.
A heavy rain seeps into your basement because the soil can't absorb the water quickly enough
A heavy rain or flash flood causes the hill behind your house to collapse into a mud slide that oozes into your home.

Unlike homeowners insurance, which is a private market, flood insurance is backed by the federal government and run through the Federal Emergency Management Agency.
April 27, 2015

Bill to encourage affordable private alternatives to federal flood insurance

The bill passed in the Senate with unanimous support and was signed into law by Florida Governor Rick Scott. “This bill gives Floridians an affordable option that may keep them in their homes, and empowers homeowners to take control of their flood insurance,”
Under the expanded options, policyholders will be able to choose the amount of coverage they would like to have on their property, such as reducing coverage down to the value of their mortgage or excluding coverage for contents of their structure.
For more information on SB 1094 visit http://flsenate.gov/Session/Bill/2015/1094

Biggert-Waters Flood Insurance Reform Act of 2012 repealed.

Flood insurance relief becomes law
WASHINGTON – March 24, 2014
Under the just-passed bill H.R. 3370, the purchaser is treated the same as the current property owner. Flood insurance rates may still go up for a buyer under rules in the new law, but they won’t rise any more than they would have if the current owner retained the property.

March 23, 2014
The US Senate passed The Homeowner Flood Insurance Affordability Act.
It refunds policyholders who purchased pre-FIRM homes after Biggert-Waters (7/6/12) and were subsequently charged higher rates

The bill no longer requires the cost of flood insurance to readjust upon the sale of a home in an area where the Federal Emergency Management Agency (FEMA) subsidizes policies.

Home sales: As a result of the Biggert-Waters Flood Insurance Reform Act of 2012, the cost of flood insurance immediately rose to its actuarial rate at the time of a home sale, and the buyer could be required to pay many thousands more per year than the seller. The just-passed bill, however, maintains flood insurance price continuity, and the purchaser is treated the same as the current property owner.

Reinstates grandfathering: All post-FIRM (flood insurance rate map) properties built to code at the time of construction are protected from rate hikes that result from new data – the flood maps created after the fact. Also important: The grandfathering stays with the property, not the policy.
Annual rate increases capped at 18%: FEMA cannot raise flood insurance rates within a single property class beyond 15 percent per year. And it cannot raise a single homeowner’s rate more than 18 percent per year. (Before Biggert-Waters, the rate was 10 percent; until the new bill is signed, it’s 20 percent.)

Annual rate increases capped by home value: The bill requires a 5 percent minimum annual increase on pre-FIRM primary residence policies that are not at full risk, but it also says FEMA must try to minimize the number of policyholders that are charged an increase greater than 1 percent of their flood coverage. For example, a home covered for $250,000 in flood damage might face a yearly increase no higher than $2,500.

The new bill includes several other provisions, including preserving the basement exception, allowing for payments to be made in monthly installments and reimbursing policy holders for successful map appeals.
March 5th 2014
People who bought homes after the passage of the 2012 Biggert-Waters Act and saw huge premium spikes could be eligible for a refund. On average, premiums would go by up 15 percent each year with a hard cap of 18 percent.

A policy surcharge of $25 for primary residences and $250 for other properties would go into a reserve fund to ensure the program has the financial wherewithal to pay claims in the event of a Hurricane Katrina-like catastrophe.
July 21, 2014 - Insurance companies will begin to issue refunds for applicable policyholders beginning Oct. 1, 2014, and all checks should be sent before Dec. 31, 2014. The refunds will go to homeowners that paid higher flood insurance rates before Congress passed the Act.

The Grimm-Cassidy Substitute Amendment to the Homeowner Flood Insurance Affordability Act (H.R. 3370) effectively lowers many flood insurance premium rates. It reinstates grandfathered rates, repeals the home sale/new policy rate increase trigger, provides refunds for people who bought pre-FIRM subsidized homes without being informed of rate increases and caps flood insurance rate increases, among other things.

TALLAHASSEE, Fla. (AP) Jan. 19, 2012 - The state’s insurer of last resort has halted the runaway growth of policyholders in recent months and begun to reduce its size and the corresponding risk it presents to millions of Floridians, the company’s president told Gov. Rick Scott and the Cabinet on Wednesday.

Scott Wallace, who is leaving as president of state-backed Citizens Property Insurance Corp. in early April, said its number of policies have leveled off at roughly 1,470,000 in recent weeks after more than a year of increasing by an estimated 30,000 policies a month.

Wallace’s report was music to the ears of Gov. Rick Scott, who has made it a top priority for Citizens to once again be a last-resort backup, if not sold, instead of the state’s largest insurer of businesses and homes. If Citizens were unable to pay claims, the difference would have to be made up by all Florida residents with insurance on their homes, businesses and vehicles.

“We’re starting to depopulate and not growing and that’s all good,” Scott said afterward. “We’re making progress.”

Wallace told reporters afterward in response to a question that he could foresee a time when Citizens could be attractive to a potential buyer in the private sector.

“That will require some additional change and I think we’re headed in that direction,” Wallace said.

But that could be some time away yet. Because of the gigantic number of policies in Citizens’ portfolio, the company’s overall exposure is estimated at $500 billion and far exceeds its ability to pay claims in the aftermath of a catastrophic hurricane or series of storms.

Any shortfall would have to be made up by a surcharge on not only Citizens’ policyholders, but also consumers who have coverage on their homes, businesses, boats and other assets with other companies.

Wallace said Citizens is also behind several of the bills working their way through the Legislature that are designed to accommodate some of the changes needed to reduce the company’s size.

Scott also applauded Citizens for working closely with the Office of Insurance Regulation (OIR).

Wallace said OIR has signed off on 30 of its recommendations designed to reduce Citizens’ client base and exposure simultaneously. They include a maximum of $1 million coverage for properties in coastal areas, a mandatory 10 percent deductible on sinkhole policies and the reduction of personal liability coverage from $300,000 to $100,000.

Created by the Legislature in 2002, Citizens was designed to provide insurance to homeowners in high-risk areas and those who cannot find coverage in the private market. It was largely an offshoot of an underwriting association formed by the state in the aftermath of Hurricane Andrew in August 1992.

However, a series of storms in 2004 and 2005 led to several private insurers either pulling out of the state or cutting back on the number homes or businesses it would provide coverage on and Citizens was no longer the “insurer of last resort.”

Wallace, 59, announced earlier this month that he plans to leave Citizens in early April after six years at the company. He is just the second CEO of the company that was formed.

“I really came to a fork in the road in my career,” he said. “I need to take some time and figure out where I want to land.”
Copyright 2012 The Associated Press, Brent Kallestad.

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