Flood insurance hikes still a peril

03/24/14 AP
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Tags: insurance, Flood insurance, Florida Legislature

photo by Seán Kinane/WMNF News (Sept 2009).

Congress sought to ease fears in seaside communities by rolling back dramatic price hikes for national flood insurance, but for many the pocketbook pain has only been delayed.

As many as 1.1 million policyholders with subsidized government insurance will still be hit with rate increases under a bill signed by President Barack Obama.

Records analyzed by The Associated Press show there are communities in every state where the adjusted price hikes would make some properties unaffordable.

Hundreds of small communities have so many homes or businesses in hazard zones that any sizeable price hikes could threaten to shutter shops and make houses tough to sell.

Rates are rising because the National Flood Insurance Program is $24 billion in debt due to a series of catastrophic storms.

Meanwhile, the Florida Legislature is moving forward with a proposal aimed at enticing private insurance companies to sell flood policies in the state that's the most vulnerable to storm surge.

It's not clear, though, that many private insurers will want to assume the risks of flooding in Florida and join two companies already writing certain flood policies in the state.

A flood insurance bill (SB542) sponsored by Sen. Jeff Brandes is on track for approval by the Senate. Similar legislation is moving through House committees.

Brandes says the legislation provides flexibility and protections for consumers and a free market for private companies that for decades could not compete with federally subsidized flood insurance rates.

However, insurance industry groups are lukewarm on the St. Petersburg Republican's bill.

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