Some flood insurance relief proposed by Pinellas Legislative delegation

01/27/14 Janelle Irwin
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Tags: Flood insurance, Biggert-Waters, NFIP, FEMA, Kathleen Peters, emergency management, Carl Zimmerman


Members of the Pinellas Legislative Delegation heard from the Florida Division of Emergency Management about ways they can help homowners save on flood insurance premiums

photo by Janelle Irwin

Devastating rate hikes to flood insurance premiums have become a focus for homeowners in low-lying and coastal areas. As Congress scrambles to delay implementation of a law that would remove subsidies on policies, Florida lawmakers are looking at ways to combat rising costs through flood mitigation planning. During a Pinellas Legislative Delegation meeting in Largo Monday, Florida Division of Emergency Management director Bryan Koon suggested rallying the state behind FEMA’s community rating system.

“Less than half of the jurisdictions in the state are even doing anything. So, we’ve got a lot of opportunity there. Then we really want to dig into, what are each individual localities doing and figure out what are they already doing that we can enhance and then what are they not doing that we can do at the statewide level to help get them additional points for that?”

The program is available nationwide for communities where homeowners use the National Flood Insurance Program. Those communities can qualify for a 5-45% discount on premiums based on a point system. In Pinellas County localities are currently getting between 10 and 20% discounts. It’s based on four categories – public information, mapping and regulations and flood damage reduction and preparedness. State Representative Kathleen Peters wants to look into streamlining a system that will boost savings throughout the entire state.

“If you have a website that anyone can go to and get that information, that’s statewide, you only have one entity managing it. Therefore, hopefully the information will always stay updated and correct, but you don’t have 50 different websites.”

That’s just one of 18 ways communities can earn points toward discounts in the program. Peters, who lost her bid for Congress in the Republican special primary this month, focused on improving the Biggert-Waters Act responsible for massive rate increases to homeowners. Some Washington Lawmakers are looking to delay the bill anywhere from one to four years, but Peters says that’s not good enough and thinks Floridians, as well as residents of other states, would be better served to start from scratch with a new program.

“The business community is getting hit immediately and our small businesses are going away. That’s what this whole country was built on. We can’t afford to be losing our small businesses. We need to be protecting, even our snow birds that come here. To think that just because they are not 100% residents here, that’s a huge economic driver that will impact our economy and our property values.”

Those two groups are most immediately affected by the Biggert-Waters Act because they are subject to complete removal of subsidies. Homeowners who are paying policies on a primary residence could see their rates increase 20% a year for five years. But North Pinellas State Representative Carl Zimmerman, a Democrat, is also concerned with a provision that says if an owner sells, the buyer will have an unsubsidized policy immediately thrust onto them – a cost that soars up to $10,000 and more for some homes.

“The real estate market in Pinellas is just taking a disastrous turn. People themselves, individuals, are being impacted to the point where they have to seriously consider walking away from their property. This is massive.”

He’s co-sponsoring a bill this legislative session.

“It allows for private insurers to sell flood insurance and it also allows for different levels of insurance.”

Supporters say that would foster more competition in the market and drive costs down. But it’s not yet clear what rates would look for Pinellas County homeowners in flood zones. Policy owners would still have the option to participate in FEMA’s National Flood Insurance Program. Subsidies are being phased out because the program is $20 billion in the hole. Finding a solution has become a bi-partisan goal, but lawmakers differ on how to find one. Florida division of Emergency Management director Koon supports delaying rate increases until something can be worked out.

“There’s a number of proposals out there and they all have some merit. I think we’re going to have to really dig in and understand what benefits each of them could bring. But frankly, it’s good to have these conversations. The program has been in existence for 45 years and anybody who’s looked at the numbers can tell it hasn’t really been successful because it’s running a $20 billion deficit. So, by bringing all these ideas to the table and discussing them, we can really come up with a better system for the future that will help prevent the impacts we see from floods today and give us better and more resilient communities and come up with rates that are fair.”

One proposal floated by David Jolly, the Republican looking to replace his former boss, Bill Young, in Congress, would create a nationwide catastrophe fund that would spread the risk. Some Pinellas County rate payers argue they have paid into a system that hasn’t had to pay out to them. Koon said spreading risk is a good thing, but so is not needing insurance pay.

“That’s usually a good thing. I’ve heard somebody say, ‘are you disappointed every year that you don’t collect on your life insurance?’ Well, no. It’s a good thing that we’re not getting all this money back from the flood insurance program. That could change like that the next big hurricane, those numbers could shift. So, I’m definitely not looking for an equitable on the payout side, but we do need to consider enrollment in the program and ensuring that those folks who need to have coverage and are required to have coverage are actually doing so so the risk is spread out across the nation.”

In the meantime, Koon adds there are things homeowners can do on their own to find some relief on their flood insurance bill.

“There are things that you can do to reduce your premium as well. Some of them are expensive like elevating your home and stuff like that. But, there are things you can do like elevating your air conditioner or your water heater or your well if you have one.”

Koon suggests homeowners talk to their insurance agent about ways to drive costs down. The legislative session starts in Tallahassee on March 4.

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