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State relief for high flood insurance bills moves ahead

TALLAHASSEE — A bill enabling private insurers to write flood insurance policies in Florida sailed through its first committee Wednesday with unanimous approval.

The Senate Banking and Insurance committee cleared the bill (SB 542) on a 12-0 vote.

State lawmakers began exploring options outside the National Flood Insurance Program to protect homeowners in low-lying areas after Congress failed to stop flood insurance increases.

One example previously cited has been a Florida coastal home bought in August 2012 that pays a yearly premium of $500. That bill soon will rise to $4,500.

“We can’t rely on Congress to fix this; instead, we must ensure Floridians are protected from egregious rate increases,” said Sen. Jeff Brandes, R-St. Petersburg, the bill’s sponsor.

U.S. Sen. Bill Nelson, D-Fla., and other senators this week have revived efforts to get a vote on a bill to delay the federal Biggert-Waters rate hikes.

Meantime, the Legislature is looking to private insurers to offer flood coverage as an alternative to the expensive national program.

The irony is palpable; the federal government got into flood insurance in the 1960s because private companies were unwilling to cover flooding.

But the National Flood Insurance Program is now more than $24 billion in the hole.

The Biggert-Waters Flood Insurance Reform Act would increase premiums for more than 15,000 households in St. Petersburg alone, much of which is located in flood zones.

“This is the most talked-about problem in the state,” said Sen. Nancy Detert, R-Venice. “Everyone understands that if we don’t solve the flood insurance problem, our coastal homes will become unsellable and people will walk away from them.

“We’ve paid more into the federal program than we’ve ever taken out,” she added. “We’ve been mistreated ... We can do better on our own.”

Florida is considered a “donor state” in the federal flood insurance program, with residents paying roughly $4 in premiums for every $1 paid in claims.

The bill filed last month by Brandes would expand a commission that regulates policy rates for storm risk to add flood experts.

It would offer guidance for the Florida Office of Insurance Regulation to help companies get a quick review and approval for writing policies.

A key provision is giving companies the ability to offer a range of coverage options, such as excluding a garage or only insuring up to the remainder of a mortgage, Brandes has said.

His proposal would allow policyholders “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,” according to a statement from Brandes’ office.

Brandes and Rep. Larry Ahern, R-Seminole, who is filing companion legislation, have vowed to make the bill their top priority.

The measure is supported by the Florida Association of Realtors, the Florida Office of Insurance Regulation, the Florida Chamber of Commerce and Florida Bankers Association, among others.

If passed by lawmakers and signed into law, the measure would go into effect immediately.

Tampa Bay real estate and insurance industry leaders have said bringing lower rates from the private market is crucial to homeowners who can’t sell their property because of unaffordable flood insurance premiums.

Brandes’ bill next goes to the Senate General Government Appropriations subcommittee for consideration. The 2014 legislative session starts March 4.

Tribune staff writer Josh Boatwright contributed to this report.

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