In Florida, a bill has been introduced that could drastically alter flood insurance, potentially making Florida the first state to push privatization over the federal program.
Flood insurance rates have increased for many Florida homeowners. Premiums are to be raised to address a $24 billion deficit in the federal flood insurance program. Floridians have paid nearly $16 billion in premiums into the federal flood insurance program since 1978 while receiving $4 billion in paid claims, according to The Gainesville Sun.
The idea behind SB 542 is to draw more private insurance companies into the market, which is heavily tilted toward the National Flood Insurance Program.
Part of the idea is to provide more options, in general. Provisions in the bill would allow homeowners to decide whether they want the flood insurance to cover the entire replacement value of their homes or if they want to opt to cover only the mortgage amount. They could also insure for the cash value of the home.
Insurers would be given more freedom in setting rates. There would be the standard rate system that goes through the state Office of Insurance Regulation or a new deregulated option.
Another provision beefs up the budget of the Florida Commission on Hurricane Loss Projection Methodology and allows the group to develop computer models to better predict potential flood damage losses that could help companies set rates.
Sen. Jeff Brandes, R-St. Petersburg, introduced the bill and had this to say about it in a statement: “Floridians deserve an alternative to the drastic rate increases of Biggert-Waters. This legislation builds a framework for a Florida-based solution that gives flexibility to homeowners. This will put Florida at the forefront of addressing this issue nationwide.”
Read more local reaction and speculation on the bill’s future over at The Gainesville Sun.