Florida Flood Insurance Premiums Rising Like A High Tide

Jan. 02--The tide of federal flood-insurance rates continues to rise in the Florida Keys.

"People are getting hammered," Mel Montagne said Wednesday.

"We thought the windstorm [insurance rate hike] was unsustainable," said Montagne, a Key Largo insurance agency vice president and board president of the Fair Insurance Rates in Monroe group. "Now flood rates are becoming really unsustainable."

Marathon real estate agent Stacie Kidwell fears continued increases in Keys property insurance premiums will burden workforce residents, particularly renters.

"If I didn't have a mortgage, I'd drop flood insurance in a minute," said Kidwell, owner of a rental duplex.

Her annual renewal of a National Flood Insurance Program policy for the property that's issued through the Federal Emergency Management Agency arrived recently with a 41 percent increase -- from $1,437 to $2,027.

"I've got long-term tenants with two kids who work hard," Kidwell said. "I haven't raised their rent in five years. Now I may have to, although it would break my heart to do it."

The ground-level duplex on 51st Street in Marathon she's owned for more than a decade is valued at $155,000. "It's never flooded. There's never been a claim," Kidwell said.

The $590 increase in Kidwell's policy includes a new $250 annual surcharge for FEMA policies that are not the owner's primary residence, plus a double-digit percentage increase in the premium. Rates vary but run from 18 to 25 percent on non-homestead properties.

"This affects us immensely down here in the Keys," Montagne said. "There are lot of second homes and rental properties."

Primary residences see a smaller surcharge of $25 and rates hikes of 8 to 10 percent, Montagne said. "But that's every year."

Condominium owners are assessed through their association maintenance fees, he noted.

FIRM, founded to fight against premium increases for windstorm insurance issued by the state-run Citizens Property Insurance Corp., has increasingly become active in the debate over federal flood policies.

"We're heavily involved with the new [program] reauthorization that will take effect in 2017," Montagne said. "To help our community, we want to get those surcharges and increased fees taken away."

A Facebook friend of Kidwell told her his flood-insurance rate has doubled in three years, from $2,100 to $4,200, with no history of any flood-damage claims.

Hurricane Sandy in 2012, following the intensely hectic hurricane seasons of 2004 and 2005, played a large part in spurring the flood-insurance increases. The storms and flooding drove FEMA's National Flood Insurance Program to a $24 billion deficit.

Congress in 2012 passed the Biggert-Waters Act, requiring FEMA to raise premiums to reduce the flood program's deficit. The law was modified in 2014 to reduce impacts on primary-residence owners but did little for second homes and rental units.

Payouts on most federal flood policies are capped at $250,000, even for some pricey waterfront properties in the Keys tagged with an annual flood-insurance premium above $42,000, Kidwell said.

About 30,560 federal flood-insurance policies are active in the Florida Keys. Overall, Florida has more than 1.8 million policies issued through FEMA.

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