How does flood insurance impact Fla.?

November 21, 2013
Author: 2013 Florida Realtors®

Congress extended the National Flood Insurance Program (NFIP) for five years through last year’s Biggert-Waters Flood Insurance Reform Act. While the Act’s goal is to make NFIP pay for itself over time and ease a current deficit, it had unintended consequences as some homeowners discovered substantially higher costs for coverage.

Florida TaxWatch conducted a study to determine exactly how Bigger-Waters impacted Florida and its counties. Their findings:

• Floridians paid $3.60 in flood premiums for every $1 that came back to cover damages.

• Florida has more than 2.05 million policies. Of those, 268,648 (13 percent) are subsidized. The Act directly impacts the subsidized policies.

• Pinellas, Miami-Dade and Lee counties have almost 48 percent of the state’s subsidized policies and will be most affected by upcoming policy cost increases.

• Monroe County has the highest density of subsidized policies (percent of all those with flood policies that are subsidized) – more than double the density of Florida’s next-highest county, Pinellas.

• Most of NFIP’s current $24 billion debt is due to claims from Hurricane Katrina and Hurricane Sandy, which had minimal impact on Florida.

• Two Florida hurricanes tapped into NFIP resources: Tropical Storm Isaac in 2012 ($407 million in paid claims) and Hurricane Wilma in 2005 ($365 million).

In November, Florida joined Alabama in filing an Amicus Curae brief in a Mississippi lawsuit against FEMA. The lawsuit claims FEMA failed to conduct an affordability study of flood insurance premium changes as required in the Biggert-Waters Act, and asks the court to delay implementation of the changes until the required studies are completed.