Florida homeowners are reeling from the devastating impacts of back-to-back hurricanes Helene and Milton, but the real crisis is unfolding in the aftermath as residents struggle with denied claims and inadequate coverage. Even those who believed they were fully insured are learning the hard way that loopholes in their policies and stringent coverage rules are leaving them exposed to catastrophic financial loss. For insurance agents, these events underscore the critical need to educate clients about the complexities of their coverage and the importance of flood insurance. Below are key takeaways every insurance professional should know.
The Flood Insurance Gap: A Costly Oversight
Flooding is the primary cause of damage from both hurricanes, yet most Florida homeowners don’t have flood insurance. Even in a state that experiences frequent storms and heavy rainfall, only 25% of residents in the hardest-hit areas had separate flood coverage prior to the storms. This alarming statistic shows that the majority of homeowners are not financially protected from one of the most common weather-related risks.
Many policies exclude flood damage outright, leaving homeowners without a safety net. Bridgette Bello, a Tampa-area resident who thought she had taken every precaution by purchasing flood insurance and separate hurricane-specific coverage, is one of many homeowners facing a nightmare scenario. Despite having multiple insurance policies, Bello has encountered delays and denials in her claims process, as insurers are classifying much of the damage under flood exclusions.
Underinsured for flood damage: Even those with flood insurance, typically through the National Flood Insurance Program (NFIP), find that it often falls short. The NFIP only covers up to 50% of a property’s value, excluding the land, and offers no coverage for temporary housing during repairs. Many victims are discovering they are on the hook for large out-of-pocket expenses despite holding flood policies.
Double Trouble: Two Storms, Two Claims
- Categorization of storms as separate events: One of the biggest challenges for homeowners hit by both Helene and Milton is that insurance companies are treating the storms as two distinct events. This means homeowners who suffered damage from Helene must prove that the destruction came from that specific storm, not Milton, to receive full coverage. Failing to document Helene’s damage properly can lead to claim denials for Milton-related damage.
- Proving damage becomes an uphill battle: Determining which storm caused the damage adds significant complexity to the claims process. Insurers will carefully assess whether damage was caused by wind-driven rain or rising floodwaters, with many policies excluding wind-driven rain altogether or attributing it to pre-existing conditions such as a leaky roof. For homeowners, the burden of proof can be overwhelming, and many claims are outright denied unless meticulously documented.
- Legal recourse is limited: Florida’s recent insurance reforms, aimed at curbing an influx of lawsuits, have left policyholders with fewer options to contest denied claims. Homeowners must now pay out-of-pocket to initiate legal actions against insurers, reducing the threat of litigation that previously served as a check on insurance company practices. With the reduced ability to sue, some insurers may feel less pressure to approve claims, knowing policyholders have little recourse.
Homeowners Abandoning Properties
The financial toll is staggering, with many victims simply walking away from their homes. For those without flood insurance, rebuilding is often financially impossible. As claims are denied or delayed, some are left with no choice but to leave their properties behind. Even for those who can afford to rebuild, the lack of coverage for temporary housing means additional out-of-pocket expenses during the reconstruction period.
While the Federal Emergency Management Agency (FEMA) has provided some assistance — $344 million as of late September — this aid is typically insufficient to cover the vast needs of those impacted by both storms. Homeowners are left hoping for charity campaigns or crowdfunding efforts to fill in the gaps, but this is not a sustainable solution for those facing long-term financial recovery.
Educate and Advocate
- Flood insurance is non-negotiable: Given the frequency of storms in Florida, agents must stress the importance of flood insurance to their clients. Homeowners should not assume that their regular policies will cover water damage — they need explicit flood protection to avoid financial disaster. As this year’s hurricanes have demonstrated, even those who believe they have comprehensive coverage may be left vulnerable without a flood-specific policy.
- Prepare clients for the documentation process: In the event of a hurricane, documenting damage immediately is critical. Agents should advise clients to take thorough photos and videos of their property both before and after a storm. Encourage clients to keep all repair and maintenance records, as claims related to roof or structural issues may be denied due to pre-existing conditions.
- Review and clarify policy details: Homeowners often assume they are fully protected against storms when they are not. Agents should regularly review client policies to ensure they understand coverage limitations, especially in relation to wind-driven rain, flooding, and exclusions for maintenance failures. It’s also important to clarify the specific steps they need to take in the event of a claim to maximize their chances of approval.
Future Implications
The situation in Florida underscores the urgent need for reform in how hurricane damage is addressed by the insurance industry. As state lawmakers begin pushing for more comprehensive solutions, the role of insurance agents has never been more crucial. Educating clients on the importance of flood insurance, preparing them for the claims process, and advocating for better policy coverage will help mitigate the fallout from future storms. While the insurance landscape in Florida remains fraught with challenges, proactive steps by agents can make a meaningful difference for homeowners facing the threat of future natural disasters.