The Florida Legislature took the first step toward creating a private alternative to the National Flood Insurance Program on Wednesday, as a Senate committee unanimously approved a bill to create a framework for a regulated Florida product.
The proposal, which passed the Senate Banking and Insurance Committee, has been put on the fast track in the Senate, which wants to jump-start the private market by allowing companies to offer homeowners alternatives to the flood insurance now available only through the federal government.
“This bill provides choices for consumers to fit their individual circumstance,” said Sen. Jeff Brandes, R-St. Petersburg, sponsor of the bill.
For example, consumers would have the option of covering either the outstanding balance of their mortgage, the replacement cost of their property, or the actual cash value of their property, rather than a single policy now available under the national program.
Under the Bigger-Waters Flood Insurance Reform Act of 2012, premiums were required to rise to reflect the true flood risk, forcing rate increases of at least 20 percent for the policyholders across the nation and much higher for homeowners in older homes that had benefited from subsidized rates for years.
Because nearly 37 percent of all policies written by the national program are in Florida, there are an estimated 268,500 homeowners who will lose their subsidized rates, sending a chilling effect on the housing market, particularly in Pinellas County, where rates have risen as much as 900 percent. Story here.