Irma is just the beginning, Sandy victims warn Floridians

@alextdaugherty 

In 2011, The National Flood Insurance Program told Claudette D’Arrigo that her Highlands, New Jersey home was structurally sound after Hurricane Irene.

When Superstorm Sandy hit 13 months later and caused her home to flood, it was a different story.

The nation’s government-run flood insurance program, which ensures 1.7 million homeowners in Florida, determined that she had 20 years of earth erosion under her home, which meant she wasn’t eligible for an insurance payout.

After submitting her 2011 document three times and contacting New Jersey Sen. Bob Menendez failed to result in a payout, D’Arrigo filed an appeal in April 2015. Her appeal was heard in January 2017 and she received her payout in August 2017.

“It was a low offer, but I accepted the offer because we needed to move on,” D’Arrigo said. “That is the process that will happen to everyone in Houston and everyone in Florida. It was a five-year wait for us to receive our money.”

As Florida and Texas begin cleanup from Hurricane Irma, New Jersey and New York homeowners who endured flooding from Superstorm Sandy five years ago are urging Congress to overhaul the nation’s flood insurance program. They want greater protections from fraud while allowing private insurers to enter the market to avoid the delays after Superstorm Sandy.

“The current program needs to be reformed,” said New Jersey Republican Rep. Tom MacArthur, who represents a stretch of coastal New Jersey damaged by Sandy. “I hear from a lot of people who paid premiums for decades and now they are getting treated in a way that no private insurer could ever treat people without being called to account. What’s the difference? You can sue your private insurance company.”

Key West resident Lee Cummings, a 69-year-old who spends his summers in the Washington, D.C. area, is worried that the delays after Sandy will also happen to people flooded by Irma after hearing D’Arrigo speak.

“They seem pretty certain that the storm is stage one and the real battle is stage two,” Cummings said. “I certainly hope that’s not true.”

Cummings, who said he used satellite maps to see that his Key West house still has its roof after Irma, has no idea if flood waters damaged his property.

Read more here.

Congress has one month to fix flood insurance. Hurricane Harvey makes it harder.

@alextdaugherty

For months, political foes like Marco Rubio and Elizabeth Warren united behind a push to overhaul the nation’s flood insurance program by capping annual premium increases and focusing on preventing damage in future floods.

Hurricane Harvey could change all of that.

Congress has spent most of 2017 negotiating the National Flood Insurance Program, which must be renewed by Sept. 30. If the program lapses, thousands of real estate transactions and construction projects in flood-prone areas could be affected. But Hurricane Harvey’s unprecedented flooding in the Houston area changes the debate about the future of flood insurance.

Massive storms like Hurricane Katrina in 2005 and Hurricane Sandy in 2012 led to thousands of expensive claims — and the program plunged further into debt as the federal government continued to provide subsidized flood insurance rates well below market costs.

“Hurricane Harvey is the latest example of why we must act swiftly in reauthorizing and reforming our National Flood Insurance Program,” Rubio said in a statement. “I would vote for a short term extension to prevent the program from lapsing, but I would prefer passage of the SAFE NFIP Act, a bipartisan bill I’ve co-sponsored … that would reform our current system.”

Rubio and other coastal-state politicians are pushing to lower flood insurance premium increases to a maximum of 10 percent per year, a move meant to help their coastal constituents. Currently increases are limited to 18 to 25 percent, depending on the property. But experts say meaningful flood insurance reform will involve moving government-subsidized rates set by the Federal Emergency Management Agency to rates that reflect the actual cost of insurance.

That means higher costs for Floridians living in flood-prone areas.

“It offers rates that are really below risk-based rates,” said Laura Lightbody, the project director for flood preparedness with the Pew Charitable Trusts. Lightbody said it will be a “missed opportunity” if Congress simply extends the flood insurance program and keeps rates the same instead of overhauling it.

Lightbody is hopeful that Congress will act because the House and Senate have already been negotiating the program’s renewal for months and the coverage of Hurricane Harvey will draw national attention to the fiscally troubled program.

Daniel Stander, the managing director of Risk Management Solutions, a worldwide catastrophic risk modeling company, said Hurricane Harvey will likely not result in an immediate increase of flood insurance rates but will compound the program’s $23 billion debt situation. However, the hurricane will likely cause FEMA to reassess the program’s cost-effectiveness.

“There is certainly a desire inside FEMA to modernize how the [flood insurance program] is run,” Stander said. Flood insurance rates “are likely to increase but I see that more by movements toward risk-based pricing than by a specific event like Harvey.”

But Florida politicians bristle at the potential for higher rates.

Florida, with more than 1.7 million policies, has 35 percent of the 5 million policies covered by the federal program — three times as many as the second ranked state, Texas, which has 593,000 policies.

Read more here.

Marco Rubio and Elizabeth Warren agree on one issue—federal flood insurance must change

@alextdaugherty 

Florida Republican Sen. Marco Rubio and Massachusetts Democratic Sen. Elizabeth Warren rarely see eye-to-eye on major policy issues but both agree the National Flood Insurance Program must be fixed. 

The program, run by FEMA, must be reauthorized by September 30 as part of the 2018 budget. Rubio and Warren, along with Sens. Bob Menendez, John Kennedy, Chris Van Hollen and Thad Cochran penned an op-ed in the Wall Street Journal on Tuesday outlining their plan to make federal flood insurance fiscally sound. 

"Powerful floods devastate communities across America every year," the op-ed reads. "After these catastrophic natural disasters, too many Americans find themselves facing a man-made calamity: a National Flood Insurance Program that overcharges and underdelivers for policyholders and for taxpayers. As members of the Senate Banking and Appropriations committees, which oversee flood insurance and provide federal disaster response, we plan to offer bipartisan landmark legislation to tackle systemic problems with flood insurance and to reframe our entire disaster paradigm." 

The proposal comes as the federal flood insurance program is billions of dollars in debt and still dealing with the financial impacts of major hurricanes like Katrina and Sandy, where homeowners said federal engineers were encouraged to lie about storm damage to limit federal insurance payouts.

Miami Rep. Carlos Curbelo also introduced legislation relating to flood insurance earlier this year. His bill would allow non-primary residences and businesses to be eligible for the same flood insurance rates as primary residences.

“This bill is critical to South Florida, especially for residents of the Florida Keys that are in desperate need of affordable housing options," Curbelo said in a statement. "The Flood Insurance Fairness Act would ensure all Americans have access to affordable flood insurance by guaranteeing that all non-primary residences and business properties receive the same rates provided to primary homes under the National Flood Insurance Program.” 

Read the rest of the op-ed here.

 

Congress more stingy on providing disaster relief than it once was

 

@jamesmartinrose

The final damage tally from Hurricane Matthew across Florida, Georgia and the Carolinas isn't yet known, but it’s certain those states will ask Congress for billions in disaster aid.

President Barack Obama, after speaking with their governors, suggested that he’ll be seeking emergency funds for damage from Matthew and earlier storms when lawmakers convene after the Nov. 8 election, and Gov. Rick Scott and Sen. Marco Rubio said Florida was certain to seek assistance.

“While the state has yet to commence an assessment of damage due to unsafe conditions remaining in many areas, we must be prepared for the long road of recovery ahead,” Rubio wrote Friday in a letter backing up a request from Scott that Obama declare Matthew a “major disaster” for his state, a designation that would allow it to seek more emergency aid from Washington.

For more, read here.

Photo credit: Pedro Portal, El Nuevo Herald

 

Read more here: http://www.miamiherald.com/news/nation-world/national/article106789687.html#storylink=cpy

 

Florida's insurance commissioner: the most important person in state government most people don't know

It is the most powerful job in state government most people can’t name.

Florida’s insurance commissioner has the unfettered ability to affect the cost of living in the state. From the property insurance policy of every homeowner, to the workers’ compensation plans of every employer, to millions of automobile, life insurance, medical malpractice and health care claims, the insurance commissioner has the final say on how much those rates will rise, and how much they fall — if at all.

The 262-person Office of Insurance Regulation touches nearly every aspect of life in Florida, from birth to death. It acts as the state’s financial sleuth, deciding if every one of those companies is financially sound enough to take on new customers, and when they are troubled enough to be shut down.

And with the stroke of a pen — and within the confines of the policies written by the Florida Legislature — the commissioner has the final say on which losses customers will pay — and which ones insurance companies must reimburse.

For the last 13 years, the job has been held by Kevin McCarty, a 27-year state bureaucrat, lawyer and graduate of the University of Florida, who steered Florida’s complex insurance market past so many obstacles he has become one of the most recognized experts in managing catastrophe in the country.

On Tuesday, McCarty, 57, will officially retire from the agency, to be replaced by David Altmaier, 34, McCarty’s deputy commissioner for Property Casualty Insurance. But for the last four months, the two Cabinet officials who by law must agree on McCarty’s successor — Gov. Rick Scott and Chief Financial Officer Jeff Atwater — were locked in an unprecedented feud over whose candidate will replace him.

The standoff underscored the political potency of the job, which not only impacts people’s pocketbooks but is a crucial cog in the state’s economic engine. More here.

Photo: Kevin McCarty, Florida Insurance Commissioner at a Miami Herald editorial board meeting, July 9, 2009. MARICE COHN BAND Miami Herald file photo

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.