Peter SchorschFor hundreds of thousands of Floridians, flood insurance rates are about to skyrocket.
The Biggert-Waters Flood Insurance Reform Act contains a little-known provision thatsaddles 268,000 Floridians with rate hikes of 20 to 25 percent each year. These homeowners will see their rates rise upon renewal. If they choose to sell their homes, new buyers will face much higher flood insurance premiums—as much as 3,000 percent higher than existing rates, according to The Miami Herald.
Understandably, civic and business groups are raising alarms. However, the government shutdown has blocked action on this legislation, which took effect on October 1st.
While the intent of this legislation—aimed at stabilizing the National Flood Insurance Program (NFIP)—may appear practical, it burdens Floridians with the lion’s share of the program’s financial responsibility. That’s not fair; that’s not practical; that’s not affordable.
When it comes to Flood Insurance, Florida is a “donor state”—meaning Floridians have paid more into the national system then they’ve received in claims. With 37 percent of the nation’s policies, Florida’s homeowners have supported the NFIP with more than $16 billion in payments over the past three decades, while claiming only $3.7 billion during the same period. Now, Floridians face insurance rate increases that are simply unaffordable. As our economy and real estate market begins to recover, this is simply not the time for Washington to impose massive hikes on potential real estate buyers and homeowners.
Washington should take action and delay this dangerous provision. In the interest of transparency, Congress should prohibit funds from being used to implement rate increases and call for a full review of this Act so that lawmakers and taxpayers may fully understand the real impact of these measures on Florida’s communities.
