They're requiring it because of the likelihood of wind damage and flood damage occurring in the same event, and they can require it because Citizens is supposed to be the insurance of last resort. If you could get coverage anywhere else, you're supposed to; if you're stuck with them you're also stuck playing by their rules.
In a standard "all-perils" property insurance policy, wind is included by default, while flood and earthquake are extra add-ons. (But, merula, how is that "all-perils" then? It's not, hence the quotes, but it's in contrast to a "named-perils" policy where the only things that are covered are those that are specifically stated in the policy, usually fire, lightning, explosion and aircraft damage.)
So, if wind is always covered but flood is only sometimes covered, what does that mean for hurricanes where the wind causes some damage and the flooding causes other damages in the same event? If you were to ask someone who writes coverage forms (the closest thing insurance has to an idealist), they'd tell you that the policy covering wind would only pay for the damage from the wind (roof, broken window, missing patio furniture), and then the flood policy would pay for the flooding (carpet, drywall, mold remediation, indoor contents).
But if you ask a claims attorney, they'll tell you that what really happens is that policyholders get really mad at the insurance companies when faced with most of their claim being denied, and they get a lawyer and the lawyer argues that the water damage wasn't caused by the whole street flooding and water entering from the bottom up, but instead by "wind-driven rain" where the roof damage let in the water from the top down and therefore the flood damage is not flood damage, it's wind damage and covered by the policy.
The entire problem could be prevented if everyone bought flood insurance, but it's very difficult to convince people that they should have it, and because the premium increases with the level of risk, the people who most need it are also those for whom it's the most expensive.
I buy flood insurance. I live in Minnesota, my flood zone is X, the closest water is the Mississippi 3 miles away. My elevation is 950ft above sea level, which is 250ft above the river at this point. I don't remember how much it costs, exactly, something like $50. I buy it because I don't want to ever get into an insurance fight like the one above.
The highest point in Florida is only 350ft above sea level. FEMA flood maps are really not worth the paper they're printed on, especially in hurricane-prone areas, because all of the data assumes pre-climate-change storm frequency and severity. And to be clear, "hurricane-prone areas" means the entirety of FL, GA, MS, AL, LA, SC, and NC, and about half of TX and VA. (The climate models don't participate in the intra-FL ranking of who's more at-risk.)
Bottom line, though, while I think you should buy flood insurance, it really doesn't matter. Citizens is requiring it, so I'm not sure what your other option would be. Go without any insurance? Move?
