Wednesday, November 22, 2017
Business

Seminole homeowners become flood insurance pioneers

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CLEARWATER — When they took a pen in hand, three TV cameras began rolling to capture the moment, jockeying for space with some flash photographers and a half-dozen smartphone users snapping pictures and video.

But the ceremonial signing Wednesday afternoon wasn't to mark a new law, foreign treaty or sports deal.

Joe and Beth Ann Chapman were pioneers in a different way, inking documents that made them the first Florida homeowners to buy a flood policy through the first homeowner insurer approved to sell such coverage in the wake of Florida's flood insurance crisis.

When they bought their Seminole home for $580,000 last September, the Chapmans had heard about Biggert-Waters, the 2012 law leading to sharp flood rate increases for older flood-zone homes. But the couple was told they could keep the seller's existing flood policy for at least a year which, combined with standard hazard and hurricane insurance, cost $9,700.

Instead, they got socked with a $57,000 bill for property insurance: about $3,000 for homeowners and a whopping $54,000 for flood coverage through the National Flood Insurance Program.

Homeowners Choice Insurance offered an alternative the Chapmans quickly embraced: $9,693 in total premiums, including $6,800 for flood.

"We're thrilled that we can find an insurance policy that is affordable," Beth Ann Chapman said.

Private insurers have written flood coverage for decades, but it has been through the federal flood program. The difference now is that Homeowners Choice — and possibly other private insurers — are willing to take on the risk themselves because higher federal premiums are making the market competitive.

Paresh Patel, Homeowners Choice CEO, said he aims to eventually write thousands of flood policies at pre-Biggert Waters rates. "We want to put things back the way they were," Patel said. "Biggert-Waters is an unjust law."

The law, intended to return the federal flood program to solvency, increases rates 20 percent or more a year for homeowners who live in older, flood-zone properties and eliminates subsidized rates entirely after a home is sold. Buyers could be hit with premiums 10 times or more higher than what the previous owner paid.

Only about 20 percent of flood policies nationally are currently subsidized. But Florida is disproportionately affected with the lion's share of subsidized properties. Pinellas County will be the nation's hardest-hit county with more than 50,000 subsidized properties.

Congress for months has been debating a delay of at least part of Biggert-Waters. The Florida Legislature, meanwhile, is considering a measure that could make it easier for other private insurers to follow the lead of Homeowners Choice in writing flood policies.

"We couldn't wait. We can't wait," Joe Chapman said. "Our mortgage company was going to (place) this whole bill on our backs."

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