If the National Flood Insurance Program does not address rising Florida premiums soon, the state may have no choice but to take over and provide flood insurance, reports the News Service of Florida.
In an effort to protect nearly 270,000 Florida homeowners who face massive rate hikes in flood insurance, state lawmakers are considering changing regulations to allow private insurers to provide coverage.
Sen. David Simmons, chair of the Senate Banking and Insurance Committee, said Tuesday if private insurers won’t help, Florida might need to create a state-run agency. The in-state solution would be a “last resort” for homeowners forced to take unaffordable federal flood insurance.
“I don’t think it’s their fault,” the Altamont Springs Republican told the News Service. “They bought a home under a national flood insurance program that has now changed the rules on them, in the middle of the game.”
This week, lawmakers voiced concerns about the end of federal flood-insurance subsidies; an action that many Realtors claim will devastate Florida’s real-estate market and economy. Leaders throughout the state called on Congress to postpone enactment of the Biggert-Waters Flood Insurance Reform Act, a 2012 law that eliminates subsidies for older properties beginning October 1.
Biggert-Waters also requires the Federal Emergency Management Agency to improve the performance of the National Flood Insurance Program, as a way to make the program financially stable. In addition, the law instructs FEMA to redraw flood zones based on “true flood risk,” resulting in skyrocketing rates for thousands of Florida residents, who account for more than one-third of all federal flood insurance policies written.
Simmons hopes the threat of the state’s withdrawal from the program will force the federal government to take action.
“We can provide leverage to get a solution to this,” Simmons said to reporters, “and if we don’t provide the leverage we’ll have a solution of our own.”
“But I don’t think our remedy is to leave these homeowners without some help.”