Florida may chase federal discounts as flood insurance rates rise

As rates climb, state lawmakers focus on a federal program that could lead to savings.

LARGO — For years, the federal government has rewarded towns with smart flood management strategies by giving their residents discounted flood insurance rates.

And for years, state officials in Florida have left it up to individual municipalities to chase those savings.

But now the state may be changing tack. Under pressure to lower Florida homeowners' climbing flood insurance premiums — the result of the 2012 Biggert-Waters Act — two Pinellas lawmakers are seeking state funding to aggressively pursue the federal discounts.

Currently, just less than half of the state's 461 municipalities take part in the federal program, though these account for most of Florida's population. And the state's Division of Emergency Management has only two employees assigned to it. Through the flood management methods already in place, the state saves about $191 million a year, said Emergency Management director Bryan Koon.

"But if you look at what's possible in the state, there's literally several hundred million dollars a year that we could be saving," he said at a meeting of the Pinellas legislative delegation on Monday.

Left on the table for years, that money could be claimed if the state adopts specific policies.

The way the federal program works, municipalities are assigned points for putting in place flood management methods that go beyond the basic requirements, such as preserving undeveloped land and buying back properties that repeatedly flood. Based on that final point tally, communities receive a rating from nine to one that determines how deeply the government will reduce their insurance rates. Municipalities that don't participate are rated class 10.

The discounts range from 5 to 45 percent. In St. Petersburg, for example, the city's class 6 rating translates into 20 percent off for property owners with federal flood insurance policies. Clearwater, which is class 7, is eligible for a 15 percent discount.

Any action the state takes is factored into a town's overall score. And some are quite simple. By distributing a brochure on flood insurance to prospective home buyers, the state could save about $1.4 million, Koon estimates. And giving people who are about to buy property in a flood plain some form of clear warning could save upwards of $9.6 million.

By next week, state officials are expected to show lawmakers a list of possible steps they could take to improve Florida's standing and how much they'll cost. They are working with state Sen. Jeff Brandes, R-St. Petersburg, and state Rep. Larry Ahern, R-St. Petersburg, to secure funding.

"We will be looking at the cost-to-benefit analysis on each one of those items to see where we can get our biggest bang for the buck," Brandes said.

Asked why the state has waited years to pursue these discounts, Koon pointed to the Federal Flood Insurance Program. Before the Biggert-Waters Act began to chip away at subsidized insurance, homeowners enjoyed artificially cheap insurance rates, he said, and few people paid attention to the issue.

"It just wasn't recognized as a huge opportunity," he said. "There was no public outcry. Now you've got public outcry."

Anna M. Phillips can be reached at [email protected] or (727)893-8779.