Outside of fires, floods are the most common and widespread of all national disasters and the average annual U.S. flood losses in the past 10 years (2001-2010) totaled more than $2.7 billion, according to Naplesgov.com.
And since 2000, Florida has experienced five federally declared disasters due to flooding.
The Creation of a Private Flood Insurance Market
Thankfully, the creation of a private flood insurance marketplace has taken its first step in Florida, according to the Fort Myers News-Press.
Senate Bill 542 is receiving unanimous support in Florida, but it remains to be seen whether or not that support will be mirrored in the Senate.
“I’ll vote for this bill, and I’ll support it because it’s important to prevent these rate increases from going forward,” Sen. Marc Rubio, R-FL told reporters. “But I would like to find some long-term certainty to this.”
Senator Jeff Brandes (R-St. Petersburg) agrees:
“In Washington this week Congress is debating a four year delay to the drastic rate increases to flood insurance from the Biggert-Waters Flood Insurance Reform Act of 2012. We can’t rely on Congress to fix this, instead we must ensure Floridians are protected from egregious rate increases.” said Senator Brandes in a news release. “This legislation puts consumers in charge and it offers flexibility to families struggling under the burdens of failed federal policies.”
Out with the Old and In with the New
The procedural vote is expected to be held next week and 60-votes are all that are needed for the bill to move to the Senate floor for a yes-no-vote.
The Act was intended to help make the government’s flood insurance program financially stable by bringing rates in line with true flooding risks, according to this article also from the News-Press.
The new proposal will allow policyholders the option of covering either the replacement cost of their property, outstanding balance of their mortgage or the actual cash value of their home.
Buying a Home
Some homeowners have seen their insurance bills jump dramatically. And some Real Estate transactions have been abandoned because coverage is suddenly unaffordable and unattainable due to rates jumping to unheard of amounts, according to this other article from the News-Press.
“What we’re seeing is a very fragile recovery in the real estate market begin to completely dissipate because folks are finding out about this at the moment they’re going to sign. Deals are just dying,” said Christine Ross, president of the Bonita Springs Area Chamber of Commerce.
And this isn’t just a problem for the sunshine state.
“There isn’t a state in the country that isn’t going to be affected,” Sen. Robert Menendez, D-N.J., said at a press conference. “This is not a coastal issue. Every state suffers from floods.”
The Homeowner Flood Insurance Affordability Act, proposed by Menendez and Sen. Johnny Isakson, R-Ga., would delay premium increases for about four years from the date of passage until FEMA completes an affordability study.
It would apply retroactively to rate hikes that took effect Oct. 1.