TALLAHASSEE — The Legislature on Thursday passed a bill encouraging more private insurers to offer flood insurance policies in the state.
Senators, in approving the measure (SB 542) by a 30-3 vote, acceded to an earlier House change requiring coverage of the full replacement cost of a home.
The bill’s sponsor, Sen. Jeff Brandes, R-St. Petersburg, has wanted flexibility for homeowners to choose replacement value or other levels of coverage.
“Floridians deserve to have choices when it comes to flood insurance,” Brandes said in a statement.
His bill “opens the private flood insurance market and frees Floridians from Washington uncertainty and irregularity.”
The bill now heads to Gov. Rick Scott.
Six “admitted carriers,” insurers regulated by the state, are eligible to write residential flood insurance in Florida.
According to the state’s Office of Insurance Regulation, they are:
♦ American Home Assurance Company.
♦ American Summit Insurance Company.
♦ Chartis Property Casualty Company.
♦ Federal Insurance Company.
♦ Fireman’s Fund Insurance Company.
♦ Homeowners Choice Property & Casualty.
American Home and Chartis are under insurance giant AIG, which made headlines for getting an $85 billion bailout during the financial crisis; Federal is part of the Chubb Group of Insurance Companies.
Another insurer, Lloyd’s, can offer flood insurance as a “surplus-lines” company. Such insurers are generally not regulated by the state but are allowed to do business here.
Another 10 companies offer excess flood insurance, or additional coverage over what the federal program offers.
Supporters have been crossing their fingers that private insurers will be less expensive for Floridians than the National Flood Insurance Program, which is backed by the federal government.
The state makes up about 37 percent of the program’s customers nationwide.
Pressure on homeowners has decreased since Congress agreed to hold off rate hikes on National Flood Insurance Program policyholders. Instead of one big increase, they can expect regular but smaller bumps in their bill.
The national program is $24 billion in the hole and needs to start charging actuarially sound rates.
That means total premiums collected should be more than total claims paid out every year.