May 01, 2014

Legislators send measure to encourage flood insurance market to gov

Florida legislators sent a bill designed to encourage insurance companies to write flood insurance in the state to the governor Thursday, after removing several provisions that allowed homeowners to obtain limited policies.

The bill, HB 879/SB 572, allows insurers to write flood insurance to replace that offered by the National Flood Insurance Program and allows them to avoid rate regulation with the Office of Insurance Regulation for five years. Insurers must offer policies that track what is offerd by the NFIP by covering $250,000 or replacement cost, whichever is less.  

The Senate voted 30-3, after the House approved it  98-11. Provisions sought by Sen. Jeff Brandes, R-St. Petersburg, had been removed by the House. His proposals would have allowed homeowners to obtain insurance that covered only the value of their mortgage, not the replacement costs of the home.

Opponents said that had the potential to give homeowners a false sense of protection for their losses while it protected the financial institutions holding the mortgage. Brandes said it offered the potential to give homeowners lower-cost options.

"Obviously, I would have preferred flexibility,'' Brandes said, but said he would settle for the higher standard this year. “Let’s get the program started. Let’s let insurers begin to write,” he said.

Rep. Kevin Rader, D-Delray Beach, said last week that the bill as not needed. It began as a response to Congress' failure to deal with potential major rate increases in the National Flood Insurance Program but when the federal government agreed to modify the controversial Biggert Water Act the bill was unnecessary.

Rep. Dwight Dudley, D-St. Petersburg, backed the measure. "We need this bill,'' he said. "It doesn’t solve everything. It doesn't fix the entire problem. But it's a good step in the right direction."

House sponsor Ed Hooper, R-Clearwater, said the bill "gets the government off our back" and invites business into the state.


March 26, 2014

Senate passes bill to give Florida flood insurance option

Homeowners could have more flood insurance options than the federally-subsidized national program under a measure unanimously passed by the Florida Senate Wednesday designed to encourage private insurance companies into the market.

The bill, SB 542 by Sen. Jeff Brandes, creates an alternative to the federal National Flood Insurance Program by authorizing private companies to write the insurance that had previously only been available through the federally-subsidized program.

The federal program has undergone major reforms in the last year that have sparked hefty premium increases for homeowners in flood-prone areas and with older homes, whose premiums had traditionally been subsidized. The outcry over the giant cost increases prompted Congress to enact a stop-gap measure that delays the most expensive changes to the Bigger-Waters Flood Insurance Reform Act, but does not repeal them. The hefty rate increases will be phased in over time.

Under the Senate plan, homeowners could potentially save money by buying less insurance than is allowed under the federal program, such as insuring their property only for the outstanding value of their mortgage, the property’s replacement cost or the actual cash value of the property. The current limits under the federal program are $250,000 for a home and $100,000 for personal property. 

The bill also authorizes insurance companies to offer various deductible amounts and to give homeowners more options for covering contents, living expenses, secondary structures, etc.

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January 30, 2014

U.S. Senate passes flood insurance protection plan but House raises hurdle

From Associated Press:

Hundreds of thousands of homeowners in coastal and flood-prone areas would win protection from sharply higher federal flood insurance premiums under legislation muscled through the Senate on Thursday after angry constituents inundated Capitol Hill with complaints.

The 67-32 vote reflects widespread alarm about changes enacted two years ago to shore up the program's finances. In many cases the changes produced unexpected, sky-high insurance rates that are unaffordable for many homeowners in flood-prone areas whose insurance has historically been subsidized by the government and other policyholders.

"Something is just terribly wrong when homeowners are more worried about raging flood premiums than they are about raging floods," said Sen. Jeff Merkley, D-Ore.

The bill would delay for up to four years huge premium increases that are supposed to phase in next year and beyond under new and updated government flood maps. It also would allow homeowners to pass below-cost policies on to people who buy their homes. People who have recently bought homes and face sharp, immediate jumps in their premiums would see those increases rolled back. More here. 


January 09, 2014

Legislators launch plan to create flood insurance option

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.

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