Does Florida Have Hurricane Insurance?

While there is no single product called “hurricane insurance,” coverage for hurricane-related damage is an integral component of property insurance policies in Florida. This coverage is typically embedded within standard homeowners’ policies or acquired through specialized windstorm policies, addressing the financial implications of these powerful natural phenomena.

How Hurricane Coverage Works in Florida

In Florida, damage from hurricane winds is generally included in a standard homeowners insurance policy. However, in high-risk coastal areas, insurers may exclude windstorm coverage, requiring a separate wind-only policy. This separate policy addresses wind damage where a standard policy might not.

A distinct feature of hurricane coverage in Florida is the hurricane deductible, which differs from the standard “all other perils” deductible. This deductible is calculated as a percentage of the dwelling’s insured value, not a fixed dollar amount. Insurers are required to offer hurricane deductible options, commonly including $500, 2 percent, 5 percent, or 10 percent of the policy’s dwelling coverage. For instance, a home insured for $200,000 with a 2 percent hurricane deductible would require the homeowner to pay the first $4,000 of covered hurricane damage before the insurance policy begins to pay.

The hurricane deductible activates when a storm is declared a hurricane by the National Hurricane Center and a watch or warning is issued for Florida. This deductible applies for the duration of the hurricane, beginning when the watch or warning is issued and extending for 72 hours after the last watch or warning is terminated. The deductible applies only once per calendar year, regardless of how many hurricanes impact the property, provided the policyholder remains insured with the same company or insurance group.

Key Coverage Components

Hurricane windstorm coverage in Florida typically extends to damage to the dwelling itself, other structures on the property like sheds or detached garages, and personal property within the home, all caused directly by hurricane winds. This can include damage such as roof loss, broken windows, damaged exterior walls, or structural issues from fallen trees. If rain enters the home through an opening created by wind damage, such as a compromised roof, the resulting water damage to the interior and personal belongings would also generally be covered under the windstorm portion of the policy.

Despite the comprehensive nature of windstorm coverage, it is crucial to distinguish between wind damage and flood damage, as standard homeowners or windstorm policies do not cover flood-related losses. This includes damage from storm surge, the abnormal rise in seawater level caused by a storm’s winds pushing water ashore, and from heavy rainfall leading to rising water and overland flooding. Even if flooding occurs as a direct result of a hurricane, homeowners’ insurance policies in Florida typically exclude this coverage.

A separate flood insurance policy is required for flood damage. The National Flood Insurance Program (NFIP), a federal program, is a primary source for flood insurance. Private flood insurance options are also available from various companies, sometimes offering higher coverage limits or broader terms than NFIP policies. Flood insurance policies often have a waiting period, typically 30 days, before coverage becomes effective, emphasizing the need to secure this protection well in advance of a storm threat.

Florida’s Insurance Landscape for Hurricanes

Florida’s exposure to hurricanes has shaped its insurance market, leading to specific entities designed to manage risk and provide coverage. Citizens Property Insurance Corporation, established by the Florida Legislature in 2002, operates as a state-backed insurer of last resort, providing property insurance to those unable to secure coverage in the private market. Citizens has become the largest property insurer in the state, as private insurers have reduced their exposure in high-risk areas.

The state has implemented “depopulation” programs to encourage private insurers to take on policies from Citizens, aiming to reduce its size and return it to its original role. This initiative seeks to stabilize the private market and limit the potential financial burden on all Florida policyholders through assessments that Citizens can levy if its funds are insufficient after a major storm.

The Florida Hurricane Catastrophe Fund (FHCF), created in 1993, is a state trust fund designed to reimburse residential property insurance companies for a portion of their catastrophic hurricane losses. The fund’s mission is to maintain insurance capacity in Florida by helping insurers manage large-scale losses, contributing to market stability. Participation in the FHCF is mandatory for all residential property insurance companies operating in Florida. It is funded through premiums paid by residential property insurers and, in some cases, through revenue bonds backed by emergency assessments on various property and casualty insurance premiums.