Many Florida homeowners have dropped their flood insurance policies, despite continuing to face serious risks from hurricanes and other storms that could lead to significant floods. Tens of thousands of people could be at risk of financial devastation in case a hurricane or storm causes flooding. Traditional homeowners' insurance policies do not usually cover damage caused by flooding. During Hurricane Dorian, 59 different counties were subject to evacuation order. While homeowners in these counties held 734,445 flood insurance policies in 2011, that number had declined to 508,731 policies by 2019.
UBS analysts studying the damage and expected damage of Hurricane Dorian predicted that insurers would have to raise their prices in Florida and elsewhere. Estimates for damages arising from natural catastrophes in 2019 reached $70 billion. Analysts anticipate that these high costs could diminish excess capital.
Florida is a pleasant place to live due to the warm and agreeable climate, but its location leaves it vulnerable to hurricanes. Being victimized by a hurricane can result in property damage. Residents of the state should be aware of many factors involved with the unfortunate nature of being in a hurricane's path. A significant portion of preparation is having sufficient insurance to pay for damage and loss. Even people who believe they are adequately protected can be surprised when there is an insurance claim denial after a hurricane. Preparation is key.
Many Florida families who filed insurance claims after Hurricane Michael might still not have received payment. At the end of June, 21,000 claims remained open.
The Chief Financial Officer for the State of Florida announced that insurance companies wrote checks totaling $631,000 at a recent Insurance Village event. Hosted by Gulf Coast State College, the Insurance Village brought together agents from 22 insurance companies so that people could inquire about their Hurricane Michael insurance claims. The CFO reported that agents met with 144 people.
Hurricanes can be costly for many homeowners in Florida who rely on insurance policies to pay for damages after a serious storm. Indeed, Florida storms extract a financial cost as well as a physical one. Between 1987 and 2016, damages from storms in Florida comprised 13 of all insured losses across the country. While hurricanes can strike elsewhere, six of the 10 most damaging hurricanes in the nation's history hit Florida during at least part of their paths. In 2004 and 2005 alone, four of these storms hit the state, inflicting damage on top of existing damage.
It seems like Floridians must worry about the possibility of storm damage after a serious hurricane every year. Many residents count on their insurance companies to help them negate their losses and rebuild after a hurricane. Nevertheless, thousands of property owners in Florida are still waiting for payments from Hurricane Michael, which struck in October 2018.
Florida homeowners must always be concerned about the possibility of hurricane damage. In doing so, they often rely on flood maps from the Federal Emergency Management Association (FEMA) to help them determine the amount and type of insurance they should carry. However, the agency hasn't updated many of its maps in quite some time, resulting in a number of Sunshine State residents being seriously underinsured.
The Tax Cuts and Jobs Act changed the tax treatment of property damage caused by floods and other natural disasters. Florida residents may only be able to claim a deduction for damage that occurs during a federally recognized disaster. Hurricanes and other tropical storms can cause damage throughout a large portion of the country. In July 2019, Hurricane Barry made landfall in Louisiana but caused flooding in portions of New York state.
Florida residents who own homes that sustained damage during Hurricane Irma are getting close to the time when they will need to file an insurance claim if they want help funding recovery costs. They have three years from the time a hurricane makes landfall to notify their insurers about claims related to damage or loss. Irma made landfall on Sept. 10, 2017, so home and property owners have just a little over a year left to file their claim.