As Hurricane Irma barrels toward southern Florida, what do Canadians who own property in the state need to know?
Florida is the U.S.’s most popular destination for Canadian homebuyers, according to a 2017 report by the National Association of Realtors. More than half a million Canadians own property there, according to a 2013 tally by the Bank of Montreal.
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Many of those homes might be on Irma’s path, but Canadians who don’t have U.S. citizenship, permanent residence or a U.S. work visa don’t qualify for federally-backed mortgages, which require flood insurance. These Canadians are also less likely to qualify for a slew of government disaster relief programs, experts told Global News.
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Here’s what Canadians with property in Florida should know:
The extent of the risk
No one is expecting Irma to flood Florida on a scale similar to Hurricane Harvey in Texas. Harvey hovered over Houston for days, dumping up to 1.5 metres of rain on hard-hit areas like Houston. Irma is moving swiftly and should bring less than a quarter of that to Florida cities.
Southern Florida also has a better flood control system than Texas, the ground is more porous and there aren’t any hills to send water rushing down from above, said Hugh Willoughby, a former research director at the National Oceanic and Atmospheric Administration (NOAA) and now a professor at Florida International University in Miami.
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Preparing your home for a hurricane
If you didn’t take the typical off-season precautions, call someone who can go in and ensure your home or condo is ready.
U.S. government guidelines for hurricane preparedness recommend trimming healthy trees and removing damaged ones in order to reduce property damage from falling branches.
It’s also a good idea to secure loose rain gutters and downspouts and clear any clogged areas in order to minimize the risk of water damage.
Ideally, you should cut the water supply to your property. Windows and doors should be covered or protected. Furniture or anything else that can be battered about should be inside the home or garage.
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Homeowners whose property is on the hurricane’s path will need flood insurance, in addition to regular home insurance, said Loretta Worters, vice-president of communications for the Insurance Information Institute.
Those with homes near the Florida coastline should also have a separate windstorm coverage that’s provided by Citizens Property Insurance Corporation, the successor of the lender of last resort that the state created in the aftermath of Hurricane Andrew in 1992, when many coastal homeowners found they were unable to get insurance.
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Most flood insurance in Florida is granted through the National Federal Insurance Program, with only a handful of private insurers also offering coverage. But NFIP policies are capped at $250,000 for damages to the home itself and $100,000 to the homeowner’s property, noted Worters.
If you want coverage above that, you’ll have to buy so-called “excess flood insurance” from the private sector.
Some mortgage lenders require homeowners to buy flood insurance – and sometimes even excess flood insurance – but not all of them do, according to Worters.
Homeowners in areas designated as flood hazard zones must have insurance in order to qualify for federally-backed loans. However, only Canadians with work visas or a green card would generally qualify for such mortgages, TD Bank told Global News. Such eligibility criteria likely exclude many Canadian snowbirds.
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And many of those government-backed mortgages in Florida aren’t actually covered by flood insurance, according to a recent investigation by the Associated Press. Only 41 per cent of those mortgages holders are paying for flood insurance.
Average annual premiums range from about $4,200 in Horseshoe Beach, a town of 169 residents on the Gulf Coast where 78 per cent of policies have been dropped since 2012, down to about $200 in several cities. In most, it’s between $300 and $500.
In general, just 42 per cent of homes along Florida’s coast are covered by flood insurance and less than 35 per cent of homes are covered in areas under partial evacuation orders.
READ MORE: Flooding, flooding everywhere: Do Canadians have insurance for it?
The bad news for Canadians who don’t have adequate coverage is that it is too late to get it now. There’s a 30-day time gap between when you purchase the policy and when it comes into effect, Worters said.
The good news, on the other hand, is that most homeowners should be able to buy flood and wind insurance after Irma even if they’ve suffered extensive property damage through Citizens Property Insurance and the NFIP, she noted. If the only option was private insurers, that might not have been the case.
Still, the NFIP has long been a big money-loser for the U.S. government, bringing it less in premiums than it shells out in claims. U.S. legislators have been labouring on an overhaul of the program that might raise premiums, and that reform might come down the pike as soon as the next few weeks, warned Worters.
Government disaster relief
The U.S. federal government typically rolls out a number of relief programs in disaster-stricken areas. Much of that help comes from the Federal Emergency Management Agency (FEMA), which provides cash for housing-related expenses.
However, only U.S. citizens, permanent residents, refugees and asylum seekers qualify for that assistance in most cases. Here’s an official list of FEMA and other federal disaster assistance programs.
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Some homeowners will also have the opportunity to temporarily suspend or reduce their mortgage payments if the storm impacts their ability to pay. However, this only applies to those with federally-backed mortgages.
Those policies would kick in wherever FEMA declares a major disaster area eligible for individual assistance programs, said Lisa Tibbits, director of public relations at Freddie Mac, one of the U.S.’s two federal mortgage giants.
Homeowners should call their insurance providers and report their situation in order to receive such assistance, Tibbits told Global News.
Filing your claim after a disaster
Once the storm has passed, you’ll need to repair what’s been damaged. It’s a good idea to call your insurer right away to find out what losses are covered, how long you have to file a claim, whether your estimated loss exceeds your deductible and whether you’ll need to estimate for repairs, according to the Insurance Information Institute.
Also, make sure to keep receipts for anything like relocation expenses, temporary repairs and repair estimates from licensed contractors.
Don’t throw away damaged possessions before your insurance company has officially assessed the amount of your loss. You should also keep in mind that temporary repairs are part of your total settlement amount. Make sure you have enough left to cover permanent repairs.
If your home becomes inhabitable, your insurance policy will also cover additional living expenses up to 20 per cent of the value of your policy.
— With files from the Associated Press and Global News reporters Rebecca Joseph and Katie Dangerfield
© 2017 Global News, a division of Corus Entertainment Inc.