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Wednesday, June 25, 2014

Florida Enacts Private Flood Insurance Law

Earlier this month, Florida signed into law SB 542, which includes a provision that allows insurers to offer private flood policies as long as that policy provides the same coverage as a standard National Flood Insurance Program policy.

Specifically, it allows insurers to offer flood insurance but only if that coverage meets these requirements, see Section 3. Section 627.715, Florida Statutes:
“Standard flood insurance must cover only losses from the peril of flood, as defined in paragraph (b), equivalent to that provided under a standard flood insurance policy under the National Flood Insurance Program. Standard flood insurance issued under this section must provide the same coverage, including deductibles and adjustment of losses, as that provided under a standard flood insurance policy under the National Flood Insurance Program.”

For ABIA members this means that a private flood insurance market is possible in Florida but only if the offerings are the same as an NFIP policy. Banks are still subject to all the requirements federal banking regulators impose but by enacting this law Florida is clarifying that the definition of a "standard flood policy" is identical to that of an NFIP policy.

Learn more about SB 542.