Make us your home page

Five things the flood insurance fix doesn't fix

President Obama is poised to sign a bill repealing many of the flood insurance rate hikes triggered by the much-maligned Biggert-Waters Act of 2012.

Bill backers hailed the measure, which caps annual increases for homeowners at 18 percent.

It's a particularly welcome reprieve to those who bought flood-prone homes after July 6, 2012, unaware they stood to lose the subsidized rates entirely, costing them thousands if not tens of thousands of dollars more.

But the bipartisan deal didn't fix everything for everyone.

1. Rates can still rise . . . a lot

One of the biggest criticisms is that FEMA is pushing properties to a "full-risk" rate that's too high. Even with an annual cap on rate increases, premiums are still moving to the point where the owners of a $200,000 home could end up paying more than $20,000 for flood insurance every year. FEMA has hired an outside firm to help it better determine the "actuarial soundness" of its rates as it remaps flood zones across the country.

2. Commercial properties still get hit

With the Biggert-Waters debate focused on homeowners, small businesses slammed by higher flood insurance rates have felt ignored. Unlike homeowners, owners of older, flood-prone commercial properties that have benefited from subsidized rates will not get a reprieve. In Pinellas County, some 1,400 business properties could be affected.

Sharp increases have forced commercial property owners to re-evaluate their business models, said Robin Sollie, president of the Tampa Bay Beaches Chamber of Commerce. Some are seeking new rate maps or mitigating against flood damage, which costs money.

3. No reprieve for investors

Just like commercial properties, investor-owned buildings are also left virtually untouched by the flood insurance "fix."

That means investors still face sharp rate hikes if their policy lapses, they have recurring flood problems or they try to sell their property. Any buyer of an older, investor-owned home in a flood zone could face paying full-risk flood rates immediately, a potential deal-breaker. The issue is particularly acute in Florida, a prime market for both investors and vacation homes. In Pinellas County alone, there are more than 5,200 second homes that could face a rate shock.

4. Florida still pays a bigger share

Since 1978, Floridians have paid four times more in flood insurance premiums than they've gotten back to cover losses — more than $16 billion in premiums compared to $3.7 billion in claims. By contrast, Louisiana property owners have paid about $4.5 billion in premiums while receiving more than $16 billion, due largely to Hurricanes Katrina and Rita in 2005.

Yet, despite concerns that areas from the Northwest to Northeast are facing significantly higher flood risk, the federally mandated rate hikes are still hitting Florida hardest. Florida accounts for 40 percent of all flood policies, while Pinellas County has more properties standing to lose their lower rates than any other county nationwide.

"I think the long-term solution still must include making FEMA publicly validate its science, maps and rates," said Pinellas County Property Appraiser Pam Dubov. "They seem to make a lot of map revisions when challenged."

5. Sellers remain losers

It's hard to press the reset button for homeowners who lost months on the market unable to sell their flood-zone homes or else settled for a lower sales price because of the Biggert-Waters overhang.

The bill retroactively attempts to help buyers of such homes with a refund of higher premiums. Sellers aren't so fortunate.

Times staff writer Alex Leary contributed to this report. Jeff Harrington can be reached at or (727) 893-8242.

Five things the flood insurance fix doesn't fix 03/14/14 [Last modified: Friday, March 14, 2014 11:03pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Tampa is 15th-most popular city to move to with U-Haul


    TAMPA —Tampa is undoubtedly a destination point, at least according to U-Haul.

    Tampa is the No. 15 destination for people moving with U-Haul trucks. | Times file photo
  2. Florida's economy growing faster than other big states and far better than U.S. overall


    When it comes to economic growth, Florida's running alongside the leading states and well ahead of the United States as a whole.

  3. Westshore Marina District project takes shape with another acquisition

    Real Estate

    TAMPA — One of Tampa Bay's prime waterfront areas took another major step toward redevelopment Friday as WCI Communities bought 2.35 acres in Westshore Marina District.

    WCI Communities, Lennar's high-end subsidiary,has paid $2.5 million for 2.35 acres in the Westshore Marina District for 35 townhomes. WCI is under contract  to buy an additional 9.5 acres.
[BTI Partners]
  4. Posh Guy Harvey RV park to open in Tampa Bay with $250,000 cottages


    HOLIDAY — Love those Guy Harvey T-shirts with the soaring marlins? In the not too distant future, you might be able to kick back in your own Guy Harvey cottage in the first-ever Guy Harvey RV park.

    Renderings of the clubhouse and an RV cottage site of the planned Guy Harvey Outpost Club & Resort Tarpon Springs.
[Guy Harvey Outpost Collection]
  5. Port Tampa Bay secures $9 million grant to deepen Big Bend Channel


    Port Tampa Bay has secured a $9 million grant from the U.S. Army Corps of Engineers for the widening and deepening of the Big Bend Channel in southern Hillsborough County.