Flood Insurance

Value of Having an Elevation Certificate

If your building was constructed prior to 1975, and it’s not at ground-level, having an Elevation Certificate may lower your flood insurance rates. These rates will continue to increase dramatically each year, until the subsidies for older homes are gone and the full rates are being charged.

However, without an Elevation Certificate, Federal Emergency Management Agency (FEMA) doesn’t know when you’re reached the proper rate level for your building’s height, because it doesn’t know how high or low your building is elevated. As a result, the rates will continue to rise, even after they probably should have stopped increasing. If your Insurance Agent has placed an Elevation Certificate in your FEMA file, then the rates will automatically level-off when the proper rate is reached.

Flood Insurance Available to Owners & Renters

Flood insurance is available to all building owners and renters. The City of Key West participates in the National Flood Insurance Program (NFIP). With the City’s participation, NFIP makes federally backed flood insurance available for all buildings, whether they are in a floodplain or not. Flood insurance covers direct losses caused by surface flooding, including an ocean storm and local drainage problems.


The NFIP insures buildings, including mobile homes, with two types of coverage: structural and contents. Contents coverage may by purchased separately provided the contents are in an insurable building. Structural coverage is for:

  • Air-conditioning
  • Floors
  • Furnace
  • Insulation
  • Walls

Important Flood Insurance Facts

  • Flooding isn’t covered by homeowners insurance, a separate policy is required.
  • There is a 30-day waiting period between purchase and coverage becoming effective (with a few exceptions).
  • Flood insurance covers damage caused by rising water - building and contents coverage is provided in two separate policies, except when written as Preferred Risk. Coverage purchased as a requirement for getting a mortgage typically covers on the building, not the contents. 
  • Flood insurance pays up to $30,000 toward the cost of elevating a home if it was substantially damaged by the flood and is being required to elevate before being restored (view the Coverage D on the Dwelling form).

Mandatory Purchase Requirement

The mandatory purchase requirement applies to all forms of federal or federally related financial assistance for buildings located in a Special Flood Hazard Area (SFHA). This requirement affects loans and grants for the purchase, construction, repair, or improvement of any publicly or privately owned building in the SFHA, including machinery, equipment, fixtures, and furnishings contained in such buildings.

Financial Assistance Programs

Financial assistance programs affected include:

  • Farmers Home Administration
  • Federal Emergency Management Agency
  • Federal Housing Administration
  • Loans and grants from agencies such as the Department of Veterans Affairs
  • Small Business Administration

Secured Mortgage Loans

The requirement also applies to secured mortgage loans from financial institutions, such as commercial lenders, savings and loan associations, savings banks, and credit unions that are regulated, supervised or insured by federal agencies such as the Federal Deposit Insurance Corporation and the Office of Thrift Supervision. It also applies to all mortgage loans purchased by Fannie Mae or Freddie Mac in the secondary mortgage market.

How It Works

Before a person can receive a loan or other financial assistance from one of the affected agencies or lenders, there must be a check to see if the building is in a Special Flood Hazard Area (SFHA). The SFHA is the base (100-year) floodplain mapped on the Flood Insurance Rate Map (FIRM). It is shown as one or more zones that begin with the letter "A" or "V".

If the building is in a SFHA, the agency or lender is required by law to require the recipient to purchase a flood insurance policy on the building. The requirement is for structural coverage equal to the amount of the loan (or other financial assistance) or the maximum amount available, whichever is less.

Amounts Available

The maximum amount available for a single-family house is $250,000 for the building, and another $250,000 for contents. For commercial property, the maximum is $50,000/$500,000.

Buildings located with type "X" zones are not required to maintain flood insurance. Yet it is available for these properties at very discounted rates.

What Is Not Covered by the Policy

The mandatory purchase requirement does not affect loans or financial assistance for items that are not covered by a flood insurance policy, such as vehicles, business expenses, landscaping, pools, outside motors, porch items and vacant lots. It does not affect loans for buildings that are not in the SFHA, even though a portion of the property may be flood prone. While not mandated by law, a lender may require a flood insurance policy as a condition of a loan for a property that is only partially within a 100-year floodplain as indicated on a Flood Insurance Rate Map.