Florida looks to private market as Congress adjourns without flood fix

Gray Rohrer, 12/13/2013 - 03:24 PM

Florida lawmakers want private property insurance companies to come to the rescue of coastal homeowners who will be hit with skyrocketing flood insurance rates at the end of the month.

Congress adjourned Thursday without passing legislation to postpone National Flood Insurance Program rate increases involved in the 2012 Biggert-Waters Act that are set to take effect in two weeks, when the calendar turns to 2014. The rate hikes are the result of a phasing out of subsidies for coastal areas in light of a $24 billion shortfall for the NFIP.

When state lawmakers began casting about for solutions this fall, a state-level alternative to the NFIP was mentioned, but only as a backstop if private companies wouldn’t step into the gap left by the federal program.

That looks unlikely because legislators are set to ease companies into the new flood market.

“There’s a limit to what the state can do unless we decide to get into the business of establishing aCitizens (Property Insurance Corp.) for flood insurance. I would vote against such an idea, as one senator,” said Senate President Don Gaetz, R-Niceville.

The Office of Insurance Regulation has already sent companies guidelines for underwriting the new risk and setting terms of coverage and new rates, but lawmakers are hoping to do more.

Sen. Jeff Brandes, R-St. Petersburg, and Rep. Larry Ahern, R-Seminole, will unveil legislation next week addressing the flood insurance issue. In a press release, Brandes’ office stated the bill “will provide private sector flood insurance alternatives” to the NFIP rate increases.

Reporter Gray Rohrer can be reached at grohrer@thefloridacurrent.com.