Florida Sen. Jeff Brandes is drafting legislation to encourage private insurers in Florida to offer alternatives to increasingly expensive federal flood insurance, his office announced Thursday.
His proposal would create new statutes in the residential surplus lines insurance market, a less-regulated form of coverage offered in high-risk situations that some companies refuse to assume.
The legislation is meant to give consumers the choice to buy minimal flood policies that cover only the amount of the mortgage or maximum coverage for full replacement costs, a statement by Brandes’ office said.
It also should allow for a wider range of deductible options.
Under the National Flood Insurance Program, some older homes in flood zones face premiums exceeding $20,000 a year, effectively causing homeowners to pay more in premiums over a short period of time than their property is worth.
The increases are part of the 2012 Biggert-Waters Flood Insurance Reform Act which aims to pull the program out of more than $20 billion in debt by removing so-called subsidized rates on older homes that don’t reflect their true flood risk.
With a bipartisan bill pending in Congress that would delay implementation of significant rate hikes in the program by four years, Brandes said his legislation would help private insurers look for ways to offer more affordable alternatives in the short-term.
“The disastrous impacts from NFIP rate increases are still looming on the horizon, and our residents deserve to have choices when it comes to flood insurance,” Brandes, a St. Petersburg Republican, said in a statement.
“I believe such freedom and flexibility will help reduce some of the financial burdens imposed by the unfair rate increases in the NFIP.”
At least one private insurer already has begun offering alternative flood insurance coverage in Florida at lower rates than the federal program and state regulators have said others are interested in entering the market.