State Senator Jeff Brandes' bill would streamline the regulatory approval of private insurers so that they can offer more coverage as an alternative to the Federal Emergency Management Agency's program.
"Congress has turned the American dream into a nightmare," he said at a news conference at the Pinellas Realtor Organization in Clearwater.
The legislators say their bill would attempt to create a wide range of flexible options for policyholders to choose so they can reach an affordable level of coverage for their property. Policyholders would have the option of covering either the outstanding balance of their mortgage, the replacement cost of their property, or the actual cash value of their property.
"It is the number one bill for me this session," Brandes said. He's introducing it now so that it will be able to get a hearing early next month in the Senate Banking and Insurance Committee, and be in line for passage from the legislature when they convene in March.
The bill is an attempt to try to bring relief to the tens of thousands of people in Pinellas and Hillsborough County (and others throughout the state) who saw dramatic rate increases kick in on Oct. 1, when the federal bill known as the Biggert-Waters Act officially became law. That bill was designed to overhaul the National Flood Insurance Program, and it quickly increases flood insurance premiums in an attempt to make the program solvent and ensure its long-term sustainability.
But lawmakers, particularly those from Southeastern states and New Jersey, have strongly objected to how dramatic the rate increases are, and have been furiously lobbying to have the law delayed or seriously reworked. None of those attempts have been successful at this juncture. Although the idea was to have people who own pricy beachfront properties pay their fair share, critics say that the majority of homes are more modest in cost and aren't on the water.
"This is about modest homes and their flood insurance rate soaring four times more than the current premiums," added St. Petersburg based Republican Representative Larry Ahern, who will introduce a companion bill in the state House.
When asked how confident he was that private insurers would be eager to enter the flood insurance market in the Tampa Bay area, Brandes said that, "When you're seeing rates of $44,000 for a $200,000 or $300,000 home in Seminole, I have to believe that … companies will be writing those policies."
But will they? Sam Miller, executive vice president of the Florida Insurance Council, told the Tampa Tribune that, "It remains to be seen, even though there's interest in it, if there's going to be private capital to make a huge footprint down here."
Brandes said he has been talking with banks in recent week to ensure that any new state regulations would meet their requirements. "The products that we create here in Florida will have to meet the burden of Fannie [Mae] and Freddie [Mac] and FHA [Federal Housing Administration]," Brandes cautioned.
It's not just Bay area counties that are heavily impacted from Biggert-Waters. Miami-Dade and Lee Counties are also being pounded by the new flood insurance rate increases, prompting Senate Majority Leader Lizbeth Benacquisto (R-Ft. Myers) to call SB 542 "a praiseworthy alternative that will result in reduced costs to policyholders."