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From the staff of the Tampa Bay Times

Brandes and Ahern propose legislation to create private flood insurance option

17

December

By Stephen Nohlgren

CLEARWATER — A bill to alleviate skyrocketing flood insurance premiums was filed Tuesday in the Florida Senate — an attempt to find a state solution to what has so far been largely a federal issue.

The bill, sponsored by Sen. Jeff Brandes, R-St. Petersburg, would encourage private companies to begin writing flood insurance policies in Florida to compete with the national flood insurance program and hopefully lower premiums, Brandes announced at a news conference.

The bill would streamline the state's regulatory procedures for flood insurance, add more state employees to vet insurance products and give home owners more flexibility about how much they insure, he said.

"We hope to have this bill to the governor's desk early in the session,'' Brandes said. "It is designed to go into effect immediately,'' he said, unlike most new laws which take effect in July.

Many mortgages written in Florida require homeowners to carry flood insurance, almost all of it provided by the National Flood Insurance Program. Congressionally mandated premium increases that began taking effect last year have caused some people's payments to rise so high that they cost more than the mortgage itself.  Story here.

From the legislators' press release:

Clearwater, FL.- Today Senator Jeff Brandes (R-St. Petersburg) and Representative Larry Ahern (R-Seminole) announced flood insurance legislation that will provide alternatives to the rising rates in the National Flood Insurance Program (NFIP).

Pointing to the failed attempt by Congress to delay NFIP rate increases, Senator Brandes today filed Senate Bill 542 and said it is time that Floridians have a free market Florida-based alternative.

“I will not stand on the sidelines while homeowners in our community are being forced out there home by more ‘bait and switch’ tactics in Washington,” stated Senator Brandes. “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.”

“The flood insurance rate increases have a disproportionate impact on Florida and its housing market; it has a devastating effect on Pinellas County,” said Representative Larry Ahern.  “We cannot wait for Congress to accomplish anything amongst the gridlock of Washington, but we can focus on private insurance solutions to increase competition and lower premiums.”

“Since the federal government is showing no interest in resolving this issue to the benefit of Floridians, Senator Brandes’ bill could represent a positive approach relying on the private market,” stated Senate President Don Gaetz (R-Niceville). “I am particularly encouraged that this bill allows homeowners to insure for the amount of the mortgage, without mandating insurance that does not meet their needs. I expect the bill will be given serious consideration by the Senate.”

SB 542 creates a wide range of flexible options for policyholders to choose so they can reach an affordable level of coverage for their property. The hallmark of the proposal will allow policyholders the option of covering either the outstanding balance of their mortgage, the replacement cost of their property, or the actual cash value of their property. The companion bill is expected to be filed in the House of Representatives by Representative Ahern in the coming weeks. SB542 will likely face its first hearing in the Senate Banking and Insurance Committee in January.

[Last modified: Tuesday, December 17, 2013 11:55am]

    

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