Article

Much Ado About Flood Insurance

Oct 08, 2015

Florida Representative Bill Hager, Senator Jeff Brandes, and Florida Insurance Commissioner, Kevin McCarty have heard Florida residents’ concerns about the steadily raising flood insurance rates. They recently sent a letter to FEMA requesting a access to data on how the National Flood Insurance Program (NFIP) determines its rates.

As all homeowners know, flood insurance is not covered under any homeowner’s insurance policy. It is coverage that you must purchase separately. Seasonal rain and risk of hurricanes mean flooding is an ongoing threat for the residents of Viera and all of Florida, making this coverage a necessity.

High rates of flood insurance is no news to Floridians, and if FEMA does share this information with Florida insurance companies they will be able to compete in the insurance marketplace. Providing much needed relief to homeowners.

The problem, according to Representative Hager , is, “The disproportionate relationship between our losses as we understand… and the premiums our people pay, and more accurately the continued increase in premiums our people pay.”

With the NFIP’s data, private insurance companies would be able to audit how the federal government makes their rates. With this information, Hagar said, “We can at minimum reach our own judgment, and to the extent that we believe Floridians are being gouged, and we do believe they’re being gouged, we can turn up the heat on our Florida delegation on this issue.”

Because the NFIP is a federal program, private insurance and the states they reside in have no jurisdiction over the rates. If Florida insurers were able to see if their policyholders were being charged unnecessarily high rates, they would be able to appeal to law makers to open flood insurance to the private marketplace.

By opening up the flood insurance to the private insurance marketplace, rates will be regulated. They would be market driven as well as loss driven, and more fairly priced based on raw data that insurance agents can analyze.

This is a very interesting time to be a Florida insurer. If the NFIP releases its data to the Florida Insurance Commission, sweeping change may be in the works. We will do our best to keep all of our policyholders informed on this exciting exchange between our state lawmakers and federal flood insurers.

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