Florida is a state that is prone to flooding. This is due to a number of factors, including the state’s low-lying geography, its proximity to the Atlantic Ocean and the Gulf of Mexico, and its susceptibility to hurricanes. 2024 has definitely been one for the books, but it is likely to be a glimpse of the future rather than an outlier – as the Earth continues to warm, 100-year storms will likely become even more commonplace.
A Loophole Leaves a Homeowner High and Dry
Recent news of a Florida homeowner denied a flood insurance claim after her home flooded during Tropical Storm Debbie highlights a critical issue for anyone considering buying property in the Sunshine State.
In the News
The woman, unaware of a previous flood claim and incomplete repairs by a previous homeowner, ended up with a hefty financial burden and a damaged home. Because a prior owner received flood insurance funds due to a prior flood, but never made the repairs, the current owner’s claim for damages from T.S. Debbie was denied. This unfortunate situation underscores the importance of understanding flood risks and the complexities of flood insurance. But there’s a glimmer of hope for future buyers.
The crux of the problem lies in a “loophole” of sorts within the National Flood Insurance Program (NFIP). If a prior homeowner files a flood damage claim but doesn’t complete the required repairs, subsequent flood insurance policies for the property become invalid. This can leave unsuspecting buyers vulnerable, just like the woman in the news.
New Law Brings Transparency to Flood Risk Disclosure
Fortunately, Florida recently enacted a new law that aims to empower homebuyers with better information. The law, originating from House Bill 1049, which went into effect on October 1, 2024 and is codified at Fla. Stat. § 689.302, requires sellers of residential real estate to disclose details about a property’s flood risk. This includes:
- Past Flood Insurance Claims: Sellers must reveal if they have ever filed a claim for flood damage with any insurance company, including the NFIP.
- Federal Flood Assistance: Disclosure also covers whether the property received federal assistance due to flooding, such as aid from FEMA.
The new law also defines “flooding” (for purposes of the seller flood disclosure):
“For the purposes of this disclosure, the term ‘flooding’ means a general or temporary condition of partial or complete inundation of the property caused by any of the following:
- The overflow of inland or tidal waters;
- The unusual and rapid accumulation of runoff or surface waters from any established water source, such as a river, stream, or drainage ditch; or
- Sustained periods of standing water resulting from rainfall.”
– Fla. Stat. § 689.302(3).
Knowledge is Power: What Buyers Can Do
While the new law is a positive step, it doesn’t require disclosure of the specific repairs made after a previous flood claim. Here’s how buyers can protect themselves:
- Ask Questions: Engage in open communication with the seller and their agent. Ask specific questions about past flood claims and any repairs that were undertaken.
- Do Your Research: Obtain a copy of the seller’s Flood Disclosure form and verify the information with independent sources. Investigate the property’s flood history through tools like FEMA’s Flood Map Service Center (https://www.fema.gov/flood-maps).
- Consult a Flood Insurance Agent: Discuss your specific needs and concerns with a qualified professional to ensure your insurance coverage is adequate.
The Bottom Line
Florida’s new flood disclosure law is a crucial step towards informed decision-making for homebuyers. However, buyer vigilance remains important. Don’t let hidden loopholes turn your dream home into a financial nightmare. By asking the right questions, doing your due diligence, and working with qualified professionals, you can navigate the complexities of flood insurance and secure a brighter future for your Florida property.
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