ST. AUGUSTINE, Fla. – Jan. 5, 2018 – A press release from FEMA went out this week reminding property owners of the importance of flood insurance. But it’s unlikely anyone in the St. Augustine area needs the reminder. With significant flood damage in the last two hurricane seasons, there can’t be many residents who fail to understand the potential for losses due to flood.
What they might not realize is the precarious state of the National Flood Insurance Program (NFIP).
Shortly before Christmas, the program received another short-term extension through Jan. 19. A similar extension was set to expire Dec. 22.
What that means is those who want flood insurance – and those required to have it by their lender – can currently obtain it.
As Doug Wiles of Herbie Wiles Insurance in St. Augustine said, “For right now, it’s status quo.”
But those in the insurance and real estate businesses are wondering when a long-term decision is going to be made on the future of the program.
The recent damage from Hurricane Irma underscored the importance of the program as well as the potential for huge payouts that could threaten its solvency. As of Dec. 26, FEMA reported that more than 27,690 NFIP claims for damage from Irma had been filed and that about 80 percent of those are closed. More than $609 million has been paid to policyholders.
Even the FEMA website acknowledged the need to come up with a plan to keep the program viable.
As the FEMA website states: “As affected communities begin recovering from the devastating impacts of Hurricanes Harvey, Irma and Maria, a timely, multi-year reauthorization is critical for insured survivors and businesses. NFIP policyholders need confidence not only that FEMA can pay flood insurance claims, but also that it will have the ability to sell and renew policies to help them protect against future flooding.”
Dan Alexander, vice president of ThompsonBaker in St. Augustine, said companies are still issuing policies through NFIP, which is good for customers. Without NFIP, there are options for some buyers but not everyone.
“There are some private companies that will write coverage, so long as a property qualifies,” Alexander said in an email to The Record. “However, most will not write if there has been a prior loss. This could make a number of properties ineligible due to the effects from Matthew and Irma.”
FEMA is urging property owners to buy flood insurance this year with a reminder that policies do not go into effect until 30 days after purchase.
Floods are the most common and costly natural disasters in the United States, FEMA notes. While there are currently more than 1.7 million NFIP policies in force in the state, about 50 percent of Florida homeowners inside Special Flood Hazard Areas had insurance against flooding before Irma made landfall on Sept. 10.
Almost 25 percent of flood insurance claims come from low-to-moderate risk areas, and they receive one-third of all federal disaster assistance for flooding, FEMA said in a release.
© Copyright, 2018, The St. Augustine Record, Stuart Korfhage. All Rights Reserved.
Reprinted with permission Florida Realtors. All rights reserved.