If you’re buying a home in Florida — or already own one — there’s a good chance your property sits in a high-risk flood zone as designated by FEMA and the National Flood Insurance Program (NFIP).
And if you have a mortgage on a home in one of these zones, your lender will require you to carry flood insurance for the entire life of the loan.
At Evolve Insurance Agency, we recommend flood insurance for all Florida homeowners, regardless of flood zone. But legally, it’s only required in certain situations — and the most common is when your home is located in a FEMA-mapped high-risk area.
In our previous blog, we covered how to reduce homeowner insurance coverage while still meeting your mortgage requirements. Today, we’re taking that same approach and applying it to flood insurance.
RELATED: New tool could help Florida homeowners weather flood risks, lower insurance costs
So let’s answer the top question Florida homeowners are asking:
What Is the Minimum Flood Insurance Coverage Required for a Mortgage in Florida?
The good news: the requirements are simpler than most people realize.
For homes located in high-risk (Special Flood Hazard Areas), most lenders require:
✔ Building Coverage
- Your flood policy must include Building Coverage with a limit equal to the outstanding loan amount OR $250,000, whichever is less.
✔ Deductible
- Your deductible cannot exceed $5,000.
And… that’s it. Those are the only two requirements most lenders care about.
This means you may be able to reduce your flood insurance coverage — and your premium — while still remaining fully compliant with your mortgage.
Let’s break down what that looks like.
4 Ways to Lower Flood Insurance Costs While Staying Mortgage-Approved
1. Adjust Your Building Coverage Limit
Compare your policy’s current building limit to your outstanding loan balance.
- If your loan balance is under $250,000, you can lower your building coverage to match that balance.
- If your loan balance is over $250,000, then $250,000 is your minimum.
- If you currently carry more building coverage than $250,000, you may be able to reduce your limit.
Important: Lowering building limits may impact how coverage applies during a claim. Always review changes with your agent first.
2. Reduce or Remove Contents Coverage
Your lender has no financial interest in your personal belongings — meaning contents coverage is optional.
Lowering or removing contents coverage can reduce your premium, but remember:
- If removed, your personal property will not be covered for flood losses.
3. Increase Your Deductible
Most lenders allow a maximum deductible of $5,000. Raising the deductible (if you’re not already at the max) provides modest premium savings, but every bit helps.
4. Remove Optional Add-Ons
If your policy includes optional coverages such as:
- Loss of Use
- Pool Clean-Up/Repair
- Other Structures
…you can remove these without affecting mortgage compliance.
These are not standard NFIP coverages but are available through some private insurers.
Need Help Reducing Your Flood Insurance Costs? We’ve Got You.
If you’re trying to find the minimum flood insurance acceptable to your mortgage lender — or you simply want to compare your options — our team at Evolve Insurance Agency is here to help.
We’ll walk you through:
- What coverage you must keep
- What you can reduce and still stay compliant
- The most cost-effective way to stay compliant
Our goal is to help you make smart decisions and get the best value for your flood insurance.
David Kronk
Owner, Evolve Insurance Agency
RELATED: Government shutdown could slow Florida home sales. New federal flood insurance frozen
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