Flood Insurance and Florida Real Estate Sales


When purchasing Florida real estate one must always be mindful of the need for proper insurance. As the recent hurricane season reminded us all, Florida is prone to flooding. Indeed, the Federal Emergency Management Agency (FEMA) considers the entire State of Florida a “flood zone.” And most homeowners insurance policies do not cover flood damage.

Why Are Some Florida Properties Ineligible For Federal Flood Insurance?

If you own or acquire a home in a high-risk area, you should strongly consider purchasing separate flood insurance. FEMA provides coverage through the National Flood Insurance Program (NFIP) to qualified property owners. However, many properties are ineligible, specifically those located along “coastal barriers.” Under the Coastal Barrier Resources Act (CBRA), new NFIP-backed policies cannot be issued to owners of such properties. There is a limited exception for buildings constructed before the CBRA took effect, provided such structures have not been significantly improved or damaged since the prohibition date.

It is not always immediately clear, however, whether a particular property is in a CBRA zone. This is something that you need to determine before you close on the property. And if there is a problem, you need to speak with a qualified St. Petersburg real estate attorney who can review the situation and advise you on the appropriate steps to take next.

For example, in an ongoing case from Sarasota, the Florida Second District Court of Appeal allowed a home purchaser to proceed with a claim against his insurance broker over an erroneous classification.  In 2008, the plaintiff contracted to buy a home in Osprey, FL. The contract was contingent on a review of the property's condition and maintenance costs, including the cost of any necessary flood insurance.

As part of the plaintiff's due diligence, his broker advised him to get an elevation certificate, basically a document that would clarify whether the property was in a coastal barrier area. The elevation certificate indicated that the property was not in a CBRA zone, and on that basis the broker quoted the plaintiff rates for an NFIP-backed flood insurance policy. The plaintiff said he purchased a policy and paid premiums to the broker. However, in 2010, long after the closing of the sale, a mistake was discovered in the elevation certificate. The corrected certificate indicated the plaintiff's house was, in fact, located in a CBRA zone. This meant he could only obtain non-government, private flood insurance at a significantly higher cost.

The plaintiff sued the broker and the company that issued the erroneous elevation certificate. The case–specifically, the plaintiff's claim for “intentional misrepresentation” against the broker–remains pending before the Florida courts. The Florida Second District Court of Appeal recently settled a jurisdictional question involving the application of Indiana law, which governs the contract between the plaintiff and the insurance broker.

A Florida Real Estate Lawyer Can Help You

The last thing you want to deal with in any real estate transaction is an unexpected development during or after closing. The highly-skilled attorneys at Kira Doyle Law can assist you with the entire closing process, including any matters involving flood insurance, title procurement and title insurance. If you are thinking about purchasing real estate in Florida, call our office in St. Petersburg, Florida at 727-537-6818 to schedule a consultation with one of our experienced real estate attorneys today!


Kira Doyle