Expert: Everyone should have federally subsidized flood insurance

Expert: Everyone should have federally subsidized flood insurance

MIAMI - Most Florida homeowners do not carry flood insurance. But should they? 

Powerful hurricanes, higher tides, more rain, and urban development have brought increased stress to already overwhelmed storm drainage. A play on the old adage, "pave paradise" and you get urban flooding which brings us to the issue of flood insurance.

Florida International University's Dr. Shahid Hamid, an internationally recognized expert on the insurance and financial consequences of hurricanes, says everyone should have federally subsidized flood insurance no matter where they live. 

"In Florida, 88% of homeowners have regular homeowners insurance but only 18% have flood insurance."

Dr. Hamid says, "It is not that expensive unless you live right on the beach. Other than that if you are a mile, half a mile inland flood insurance is reasonable." 

Dr. Hamid is a Professor of Finance and Chair of the Finance department in the College of Business at Florida International University. He also serves as the Director of the Laboratory for Insurance, Financial and Economic Research located in the International Hurricane Research Center at FIU.

A reasonable flood insurance rate, according to Hamid means about $500-$700 a year. Important to note that many homeowners don't know but find out the hard way. Standard homeowners insurance does not cover flood damage. 

Miami-Dade County does far better than the state-wide numbers for homeowners who have flood insurance. Dr.Hamid says, "I think in Miami Dade we are a little better off. We have 35% that have flood insurance."

The Florida Legislature approved legislation mandating that Citizens Insurance-the state-backed insurance agency-will require most policyholders to carry flood insurance by January 2024.  

Starting in January 2024, all  Citizen insured structures with a replacement value of $600,000 must obtain flood insurance. 

The value requirement of the structure drops until 2027, when all Citizens-covered structures, regardless of value, must maintain flood coverage, according to Citizens Insurance.

For sure, homeowners insurance and flood insurance have increased in price. 

Get ready to pay more in the future. It is a case of paying the price to live in paradise.  

Dr. Hamid gives a personal insight comparing the cost of his homeowner's policy and his flood insurance for a West Kendall home, he told CBSNews Miami, "My payment 12 years ago was $500 max, now it is about $700 max, but my premium for the homeowners was $3,000 in the last bill $13,000." 

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