As the U.S. Senate Banking Committee plans a hearing today on the planned rate hike on flood insurance policies, Gov. Rick Scott is urging Florida's senators to push for a delay and an extension in the federal subsidies.
"In cases where new maps move a property into a flood zone, homeowners may find it impossible to sell their properties to a new owner who will be shocked with the massive premium increases required to secure a mortgage,'' Scott wrote in a letter to U.S. Sen. Bill Nelson and Marco Rubio. "This unfair consequence could devastate parts of Florida's real estate market, stymie Florida's economic recovery, and diminish the state's tax base."
Under the Biggert-Waters Flood Insurance Reform Act of 2012, flood insurance rates will rise about 20 percent annually beginning Oct. 1 for homes in older, flood-zone areas that have previously enjoyed subsidized rate. The rate increases will continue until their premiums reflect the full market risk.
The rate increases are intended to keep the national flood insurance program from spiraling into insolvency by phasing out lower, subsidized rates for older properties in flood zones.