Local, state and federal officials are seeking solutions to rising cost of flood insurance.
CLEARWATER – Increasing rates for flood insurance is on the minds of local, state and federal officials, as the search continues for the proper balance of affordability and solvency.
Pinellas County Commission Chair Karen Seel and Intergovernmental Relations Manager Wendy Nero recently took a trip to Washington D.C. to talk to federal lawmakers about the undue burden being placed on local property owners and real estate.
The women gave a report to the commission during the Jan. 14 meeting.
Seel said they communicated the impact that the Biggert-Waters Act was having on Pinellas County, which has the largest number of affected policyholders in the National Flood Insurance Program. She said they wanted federal officials to understand that the hardship wasn’t just on wealthy beach property owners.
More than 46,000 properties with a median value of $132,245 are facing drastic increases in flood insurance premiums compared to only 253 at values more than $1 million. More than 22,000 properties aren’t on the waterfront and have no water view. Approximately 17 percent of the county’s tax base is affected.
“It was eye-opening and frustrating,” Nero said of the trip. She added that she believes they were able to bring a “greater level of awareness and sensitivity to the issue.”
Nero said it was important for lawmakers to understand the different challenges facing people in Florida as compared to those in Louisiana and other parts of the nation. She said a big concern for people with rate increases was that they had no recourse and no advocacy.
One of the most significant messages is that simply delaying NFIP reform isn’t the solution, Nero said.
“We have to make the program solvent and not do it in four years,” she said.
Among measures Congress is considering is a delay until an affordability study can be completed. Another idea is to reduce the increases from 25 percent to 10 percent. Another is to tie insurance rates to the property, not the owner, to keep insurance rates stable. A push is on to empower consumer justice to provide an independent review of rates and advance notice along with an appeals process, Nero said.
She said things were beginning to happen fast with the Senate expected to “take up something” within the next few weeks. She said the bigger challenge would come from the House.
“There’s a $900 million deficit to overcome,” she said.
Biggert-Water Insurance Reform Act of 2012 was put into place to try to deal with the debt amassed starting with Hurricane Katrina and continuing through Superstorm Sandy.
Sen. Bill Nelson spoke on the Senate floor Jan. 15 and “urged his colleagues to take up and pass legislation that would give millions of consumers relief from the dramatic flood insurance rate hikes that began Oct. 1,” according to an email from the senator’s office.
Nelson said a provision in the pending budget bill would “cover less than a quarter of all the flood insurance policies being affected by the huge rate hikes, and “that’s why we need to move forward with passing the broad bipartisan bill that will delay these rate hikes for several years …”
The budget bill has since been passed by Congress. While it includes some relief from the effects of flood insurance reform, it does nothing for commercial property, according to an update from Robin Sollie, executive director of Tampa Bay Beaches Chamber of Commerce.
In an email sent out Jan. 17, Sollie said the bill wouldn’t help properties that have already received higher insurance bills, nor will it help anyone trying to buy or sell a home. The relief doesn’t apply to homes that are now considered flood prone due to FEMA’s new maps. She concurs with Nelson that only about a quarter of polices would be effected.
Meanwhile, state lawmakers continue to talk about private flood insurance for Floridians. Rep. Larry Aherns recently filed a bill that lays the framework for implementing a private insurance program.
Commissioner Susan Latvala voiced concern about private flood insurance in Florida, which she said could make people pull out of the federal program, further increasing costs of policies with fewer people paying into the federal program.
County Administrator Bob LaSala pointed out that property owners could not be refused flood insurance under the government program, but private insurance companies could refuse to write policies, then property owners would have no choice but to use the government program.
Latvala advocates doing more to mitigate flood damage. LaSala said the county is looking for ways to improve its rating, which would affect the cost of insurance for its citizens. Latvala suggested that residents might be willing to pay a tax if the money would be spent to mitigate flood risk and lower insurance rates.
Commissioner John Morroni sold his home in Feathersound in December. He said the insurance premium went up from $600 to more than $4,000 for the homeowner, which was almost a deal-breaker. He said people weren’t even interested in looking at waterfront property right now unless they were wealthy.
“All they want is high and dry property,” he said.