U.S. Sen. Marco Rubio is finally standing up for Floridians hit by punishing flood insurance premium increases, and state lawmakers in Tallahassee have hatched a plan to woo private flood insurers to the state. But more than three months after a federal law eliminated flood insurance subsidies from policies for some older homes, the best solution remains congressional action. Florida should keep looking for a state alternative, but this problem is best fixed in Washington.
The plan by state Sen. Jeff Brandes, R-St. Petersburg, to establish a private flood insurance market in Florida sailed through its first hearing last week. Rep. Larry Ahern, R-Seminole, is planning to push the same plan in the House for the legislative session that begins in March.
But even if the proposal sails through the Legislature, relief won't be immediate, as both private insurers and state regulators would need to gear up for the new products. Nor is there any guarantee about potential rates or whether a key provision of the plan to help keep insurance costs low — to allow homeowners to buy only enough insurance to cover their mortgage — would be accepted by lenders.
Even Brandes acknowledges it still would be best, in the short term, for Congress to pass legislation delaying the implementation of Biggert-Waters for up to four years. That would give both the Federal Emergency Management Agency and Florida time to build insurance plans that are more affordable and sustainable.
After weeks of being invisible, Rubio finally made it clear last week that he would support a plan by a bipartisan group of senators, including Sen. Bill Nelson, to delay Biggert-Waters implementation until rates can be studied for affordability. The Senate vote could come this week.
Opponents to delay are claiming that stalling Biggert-Waters and its higher rates will exacerbate the flood insurance program's $24 billion shortfall. But they fail to appreciate the damage the legislation already has wrought in communities across the nation — stalling real estate transactions and trapping families in their homes. That impact would only grow later this year when the law will eliminate another group of subsidies for policyholders who had grandfathered rates after updated flood maps put them into a higher-risk zone.
Nowhere has the impact been greater than in Pinellas County, home to the most subsidized policies in the nation. Under the federal changes, policy costs are rising 20 percent a year for properties built prior to the creation of federal flood maps, roughly the mid-1970s. But for new buyers of those homes, subsidies are being eliminated, meaning modest homes that can be miles from the coast have become unsellable to anyone but cash buyers because new owners would pay up to 10 times more.
The federal insurance program does need reform, as Rubio made clear he will insist upon even as he supports a delay in Biggert-Waters. But as the senator came to appreciate, Congress first needs to stop the crisis it created and go back to the drawing board.