Florida Legislature passed a law in December 2022 to address the state’s property insurance crisis, which included a provision that mandates customers of Citizens Insurance, the insurer of last resort, to purchase flood insurance. New customers located in areas designated by the Federal Emergency Management Agency as special flood hazard areas will be required to have flood insurance to be eligible for a Citizens policy by April 1. Existing policyholders in those areas must obtain flood insurance at renewal for policies renewing on or after July 1.
The implementation of the new policy requirements will be phased in for new and existing customers over the next five years based on their coverage amounts. For policies insuring property to a limit of $600,000 or more, the flood insurance requirement will begin on January 1, 2024. For policies insuring property to a limit of $500,000 or more, the requirement will start on January 1, 2025, and for policies insuring property to a limit of $400,000 or more, the mandate will begin on January 1, 2026. All other policies will be required to have flood insurance by January 1, 2027.
The supporters of the new statute view it as a significant step towards reforming Florida’s insurance market. In contrast, the opponents argue that it will not provide relief to consumers facing rapidly increasing premiums. Citizens explained that flood damage is typically not covered under the usual “multiperil” policies and that requiring flood coverage would benefit customers in terms of out-of-pocket repair costs. According to Citizens, only 18% of Florida homeowners had flood coverage as of 2022
