Flood insuranceFlorida lawmakers want homeowners to have more flood insurance options

Lawmakers in Florida are planning for a future in which coastal communities can no longer depend on the federal government for affordable flood insurance coverage.

The Federal Emergency Management Agency’s (FEMA) flood program is facing insolvency after recent disasters such as hurricanes Katrina and Sandy, so Congress has moved to increase flood insurance rates across the nation. Legislation proposed by Florida state senator Jeff Brandes (R-St. Petersburg) will give homeowners more coverage options in the local private insurance market. If passed, Brandes’s bill could lower premiums by excluding coverage of a detached garage or covering only the value of a home’s mortgage rather than its full replacement cost. The bill will also ensure that private policies meet or exceed the National Flood Insurance Program’s requirements — a move important for lenders who have historically supported government-backed policies.

Brandes also wants to establish a long-term database of property elevations in flood prone areas by requiring surveyors to submit a copy of a home’s elevation certificate to the county property appraiser when a home is reviewed for a new flood insurance policy. “This bill just offers a lot more flexibility, so you can bring down the cost and have affordable flood insurance coverage. It’s (current coverage options) not affordable long-term for many Floridians,” Brandes said.

State officials believe a robust private market option is the only long-term solution to rising insurance rates, but they will have to deal with lenders before that option is realized. According to the St. Petersburg Tribune, not all lenders that offer Fannie Mae and Freddie Mac-backed mortgages are willing to accept a private flood policy, even if its coverage is comparable to a federal policy. U.S. Representative David Jolly, (R-Florida) is backing a plan which will push lenders to accept private policies.

“On Capitol Hill, it is challenging environment. You have many members who are not from a coastal state and they really don’t have reason to appreciate the significance of what the increased flood insurance premiums have done to homeowners,” Jolly said.

TheTribune points out that insurers thinking about offering flood coverage will lack access to flood risk data - vital to setting appropriate rates — unless FEMA, the only agency that has collected such data over the past four decades, releases the information. Finding a way for FEMA to release that information while ensuring sensitive homeowner information is not compromised will be a next step in the process, Jolly says.

In addition to helping homeowners get affordable flood policies, Brandes also wants coastal cities to review their building rules to make existing structures safer from storm surge and to ensure future development is not considered high-risk by FEMA. “What we’re asking is for each individual community to really contemplate the peril of flood and to think through how to best plan to utilize their land in the future, understanding that flood insurance is probably not going to get cheaper than it is today,” said Brandes.