Flood Insurance Rate Hikes Loom Next Week
Homeowners, realtors and politicians are scrambling in Tallahassee this week, trying to determine what, if anything, they can do to stop major flood insurance rate increases set to go into effect next week. Of the two million properties covered by flood insurance in Florida, 13% have subsidized rates, meaning the premiums are lower than they should be.
New rules passed by Congress in 2012 aim to fix the gap between what people are paying and what they should be paying. According to realtors, the cost of many policies could jump by more than 400%.
The chairman of the Florida House Insurance and Banking Subcommittee, state Representative Bryan Nelson, says the state may be able to opt out of the federal program in the long run. But right now, he says, Congress should postpone implementation of the Biggert-Waters Flood Insurance Reform Act.
"We just need to take care of the citizens of the state of Florida", Nelson said. "Obviously, the easiest and the quickest would be for them just to delay it, and let’s look at it and give us some options, but it’s easier said than done."
More than 40% of all the policies in the National Flood Insurance Program are in Florida. According to the Office of Insurance Regulation, the state has received just one dollar in claims for every four dollars homeowners have paid in to the national plan since its inception.
Major losses from hurricanes have caused the flood insurance program to run a deficit of $24 billion.