Senate Bill 2A Sets Home Values for Flood Insurance
February 8, 2024
In December of 2022, Florida Governor Ron DeSantis enacted changes to the state’s property insurance laws by signing Senate Bill 2A into law.
The comprehensive bill addresses Florida’s continuing home insurance crisis and is intended to ensure homeowners in the Sunshine State have access to affordable private market property insurance coverage.
Citizens Property Insurance Corporation (Citizens) is a not-for-profit alternative insurer that provides insurance to the public and serves the needs of Florida homeowners and property owners who cannot find suitable coverage.
As a government entity, Citizens serves as a last resort insurer for those who are denied insurance through traditional sources and sells policies through independent partner agencies and their appointed agents.
The non-profit carrier offers several types of coverage statewide that is tailored to meet the unique needs of specified Florida homeowners, condominium unit owners, mobile home owners, and renters. Roughly 4,500 agencies currently are appointed by Citizens Property Insurance Corporation to help meet the insurance needs of people who are "in good faith" entitled to coverage but unable to obtain it in the private market.
How many Floridians have property insurance policies...
According to the Insurance Information Institute, there are over 7.5 million property insurance policies as of the new year. Nonetheless, homeowners without coverage are between 15-20%, which is higher than the 12% national average. The state-directed carrier insures just under 1.5 million property owners through the efforts of Citizens Property Insurance Corporation.
Citizens has announced rate increases up to 50% and is canceling thousands of policies across Florida due to inflation pushing the insurable value of property above the maximum allowed. The amount of dwelling coverage you can buy is limited to $700,000, except for Miami-Dade County and Monroe County residents (up to $1 million of coverage).
Replacement Value Requirement for Flood Insurance
Senate Bill 2A provides a descending replacement value timetable for which flood insurance coverage must be implemented for personal lines residential Citizens policyholders. For risks located in areas designated by the Federal Emergency Management Agency as FEMA special flood hazard areas, flood insurance must be secured for new Citizens Homeowner Policy holders with an effective or renewal date on or after April 1, 2023.
For others, the requirement to obtain flood insurance at policy issuance (or renewal) is effective in accordance with the timelines as specified below:
- March 1, 2024, for policies insuring property to a limit of $600,000 or more.
- March 1, 2025, for policies insuring property to a limit of $500,000 or more.
- March 1, 2026, for policies insuring property to a limit of $400,000 or more.
- March 1, 2027, for Citizens policies without limits for residential property value.
The value requirement of the structure drops until 2027, when all Citizens-covered structures, regardless of value, must maintain flood coverage. Senate Bill 2A also amends the mandatory flood insurance notice by requiring it to be part of the declarations page and established the Florida Optional Reinsurance Assistance (FORA) program for purchase of optional hurricane reinsurance that insurance companies can purchase at near market rates.
Do You Need Florida Flood Insurance?
Because of the distance that your property is to water, flooding is a big concern in the Sunshine State both along coastal areas and inland. Working with a qualified agent, purchasing flood insurance protection can help protect your assets while providing peace of mind should a disaster happen. Plus, FEMA warns that 1 in 5 flood insurance claims come from outside of high-risk flood zones and just one inch of water can result in five-figure damages.
“Anywhere it Rains, It Can Flood!” – Florida Department of Services
Although Florida law does not require flood insurance for all properties, mortgage lenders and federally-backed home loans most often do. This helps offset the cost to repair or replace your home due to major flooding. Nonetheless, the vast majority of Florida residents remain uninsured for flood damage. Remember, do not wait until its too late, as flood policies can take upwards of a month to be activated after the policy is acquired.
The Florida Legislature has been working to craft new legislation to tackle the state’s property insurance crisis. Several new bills like Senate Bill 2A seem to be taking a step in the right direction but the timeline to see major relief remains uncertain. Our experienced staff of independent agents can help find the home, condo or renters insurance policy that works best for you. Call 1-833-450-9490 to speak with the pros at Nsurance Nation today.
