EDITORIAL: A flood of insurance rate hikes in Florida
Plus, health and automobile insurance companies are seeking
The once delayed massive increases in National Flood Insurance Program rates are just beginning. The insurance tide began swelling on
Blame the Biggert-Waters Flood Insurance Reform Act of 2012, designed to back-fill the
Howls of protest led to congressional passage of the Homeowner Flood Insurance Affordability Act of 2014, but that law only delayed premium increases for two years. The reprieve has ended. Those real estate fears are very real again. Yet there is no groundswell of public opposition, no congressional movement on restraining rates. Yet is the key word. When homeowners begin receiving higher bills that promise to continue mounting, a broad outcry should be expected.
Owners of homes built prior to 1975 enjoy a federal subsidy and pay grandfathered low rates. Biggert-Waters attempted to eliminate those subsidies, but the Affordability Act wisely ended that threat.
Subsidized second homes and businesses will absorb the high end of rate increases, more than 20 percent. Primary homes are set to be billed about half of that. But those increases will occur for years.
What can a property owner do?
Concerning the request for an average 6.8 percent premium increase from
But Citizens will counter that expensive water damage claims not connected to weather are surging, filed by deceitful contractors and greedy attorneys who assume homeowners rights and take advantage of this so-called "assignment of benefits" to unscrupulously inflate repair costs. When insurers deny claims, water mitigation companies file lawsuits. This has become a cottage industry.
The NFIP beast is not easily tamed, but options exist to mitigate premium increases or avoid them.
Homeowners without a mortgage can forgo flood insurance all together. Homes in high-risk areas with mortgages from federally regulated or insured lenders must be insured from floods. Property owners with homes lying in moderate to low flood risk zones are not required to carry those policies. But that risk became a nightmare for a whole lot of homeowners in
Self-insurance, by depositing money monthly into a family disaster account, has its perils should a flood occur before the pot of money reaches a satisfactory amount. Another option, albeit quite expensive, would be elevating a home.
Two years ago, the Legislature gave private insurance companies the authority to sell flood policies. One insurance executive told Herald reporter
As the
Private flood insurance in
NFIP premium increases could generate a seismic shift away from waterfront living for all but the rich. That should not be allowed to happen.
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