Biggert-Waters Act has island punch

By Rick Catlin, Islander Newspaper

November 18, 2013

The Biggert-Waters Act that phases out over years the government subsidies for flood insurance premiums on high-risk properties is impacting Anna Maria Island.

Brent Moss of Anna Maria Island Insurance, 5702 Marina Drive, Holmes Beach, said the federal legislation delaying implementation of Biggert-Waters Flood Insurance Reform Act of 2012, was intended to give Congress time to overhaul the National Flood Insurance Program and establish a timeline for raising flood insurance premiums and sustain the program.

In late October, a bipartisan group of senators and representatives announced their plan to delay Biggert-Waters.

The House voted 281-146 in July to delay implementing Biggert-Waters, but the Senate was unable to come up with a companion or compromise bill until last week.

On Nov. 15,  Sen. Bill Nelson, D-Fla., said in a press release, the bipartisan group has reached an agreement on legislation that would delay implementation of the Biggert-Waters Act by four years.

Nelson said the bill would be introduced in the Senate this week.

But Moss said there is no guarantee the legislation would pass quickly in the Senate.

“How long that will take is anyone’s guess,” Moss said.

He said he’s been in touch almost daily with representatives of the National Flood Insurance Program, which is run by the Federal Emergency Management Authority, and “they don’t even know.”

But the result — a dramatic rise in premiums that took effect Oct. 1 under the act — is being viewed as catastrophic by many who serve the island market in real estate and insurance.

Until Congress passes a law delaying the act and it is approved by the president, Biggert-Waters remains in effect, as do new, higher flood insurance premiums, he said.

And Biggert-Waters already has impacted a number of Moss’ clients, who have seen flood insurance premiums rise at renewal time.

Homes most affected are those built before 1974, which are mostly ground-level, he said. Houses built with elevated living space will likely see little or no effect on flood insurance costs, Moss said.

“Obviously, those whose premiums really jumped are upset, but there’s nothing to do but wait,” he said.

Agent Kim Brito of Academy Insurance, 7330 Cortez Road W., Bradenton, said one island homeowner had a premium increase from $1,200 to $11,000.

Brito and Moss agree that it would help property owners in high-hazard flood areas if flood insurance premiums could be paid in installments. At present, flood insurance must be paid “in one lump sum at renewal,” Brito said.

Bradenton Beach building official Steve Gilbert said that without any changes to Biggert-Waters, Anna Maria Island could become a ghost town.

“I’m getting calls every day about what’s happening to flood insurance rates. A delay in implementing these new rates is really almost a necessity for the island to survive,” he said.

Anna Maria building official Bob Welch said the Biggert-Waters Act is so complicated that online classes are offered for insurance agents and building officials.

Welch said a delay in implementing the law would go a long way toward educating those who need to understand it.

Biggert-Waters also is affecting the island’s real estate market.

Agents at Wagner Realty, Big Fish Real Estate and Gulf-Bay Realty have reported lost sales because of high, up-front insurance premiums required at closing.

Jesse Brisson of Gulf-Bay Realty, 5309 Marina Drive, Holmes Beach, said allowing monthly flood insurance payments would be a great help.

“Without some legislation, we’re all going to be losing sales,” he said.

The high cost of flood insurance will make cash sales more attractive to sellers, he said. The buyer would simply avoid paying flood insurance and hope for the best, Brisson said.

Mortgage companies require flood insurance, but owners can opt to go bare if they are not encumbered by a mortgage.

“Buyers now are checking their survey elevation and shopping for flood insurance before making any purchase. It’s really affecting the older, ground-level homes,” he said.