New state law aims to better inform homebuyers about flood risks and encourage coverage

JACKSONVILLE, Fla. — Hurricane Helene caused catastrophic flood damage along Florida’s coasts, but relatively few homeowners in the Sunshine State carry flood insurance.

Now, state leaders are hopeful a new state law that took effect this week will encourage more to get covered.

The Insurance Information Insitute estimates Helene caused between one and two billion dollars in insured losses in Florida.

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It’s a relatively small amount when you consider Hurricane Ian caused an estimated $50 billion in insured losses back in 2022.

The reason for the stark difference?

Helene’s damage was primarily driven by storm surges and flood waters, neither of which are covered by property insurance.

“It’s under flood insurance. And you don’t have flood insurance, and unfortunately, most of the victims of this tragedy do not, you’re not going to have coverage for this,” said Mark Friedlander with the Insurance Information Institute.

Friedlander explained flood insurance on average costs about a third the price of property insurance in Florida, but only about one in five Floridians carry it.

However, a new state law aims to encourage more people to get covered.

Sellers and real estate agents previously only had to disclose to homebuyers whether their property had previously sustained flood damage.

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Now, they’ll also have to tell them if a flood claim has ever been made on the property or if they’ve ever received federal assistance for flood damage.

“So, either way, you must now disclose the type of damage we saw from Hurricane Helene,” said Friedlander.

State Representative Angie Nixon (D-Jacksonville) co-sponsored the bill this past legislative session.

“The home is one of the biggest purchases, if not the biggest purchase, someone will make in their lifetime and they should know as much as possible about what they’re getting,” said Nixon.

Over in flood-prone San Marco, we caught up with homeowner Katie McNeal.

While she said she believes the new law might help some uninformed homebuyers, she argued it’s really the responsibility of the buyer to do their homework.

“And I definitely think you should have flood insurance no matter where you are. It’s less than $1,000 a year for a primary residence,” said McNeal. “Whether or not the buyer is disclosed by the seller, I don’t really have like strong feelings that should be the law, but as a buyer you should protect your own interests.”

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But Nixon argued helping homebuyers understand the risks will help them make more informed decisions about whether they might need flood insurance.

“People move into our state, and they are not familiar with whether some areas are low lying, what the infrastructure is like,” said Nixon.

Unfortunately, Friedlander explained because flood and property insurance are not connected, Floridians shouldn’t expect this change to drive down their homeowners insurance rates.

But he did note, more people getting flood insurance, should improve the health of the overall flood insurance market.

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