NFIP Rate Hikes hit FL Homeowners in 2014. Private Flood Coverage Coming to Market

Lawmakers in Florida are hoping to step in and take action after Congress failed to pass legislation that would postpone the National Flood Insurance Program (NFIP) rate increases that are part of the 2012  Biggert-Waters Act. The rates hikes, scheduled to begin January 1, 2014, have come about as the result of subsidies for coastal areas being phased out after a $24 billion shortfall for the NFIP.

Lawmakers want private property insurance companies to offer coastal homeowners relief before they are hit with increased flood insurance rates on January 1. And if that fails, the idea of a state-level NFIP alternative may be a solution to fill the gap left in the wake of the federal program. However some state lawmakers are opposed to establishing a Citizens Property Insurance Corporation-type entity to offer flood insurance for Florida’s costal homeowners.

“There’s a limit to what the state can do unless we decide to get into the business of establishing a Citizens (Property Insurance Corp.) for flood insurance. I would vote against such an idea, as one senator,” said Senate President Don Gaetz, R-Niceville.

In fact, Florida’s Office of Insurance Regulation has already delivered guidelines for underwriting the new risk and setting terms of coverage and new rates for flood coverage to private insurers, but lawmakers are hoping to do more.

Florida lawmakers have little faith in Congress to provide a solution to the imminent flood insurance rate increases set to come about January 1, but they don’t want Florida (and its citizens) to take on the risk either.