CLEARWATER — With more than 51,000 homeowners in Pinellas County buying flood insurance, the recovery of the local real estate market is at risk from soaring insurance premiums, local officials say.
Now, some local lawmakers say they cannot wait for the federal government to resolve the problem and they plan to file legislation that would open up Florida’s flood insurance market to more private insurers.
State Sen. Jeff Brandes, R-St. Petersburg, and state Rep. Ed Hooper, R-Clearwater, told Pinellas County commissioners Tuesday they are drafting bills to make it easier for insurers to offer an alternative to increasingly expensive federal flood insurance.
At the annual meeting of the commission and local state lawmakers, commissioners also asked for more flexibility on how Penny for Pinellas sales tax money can be spent and more Florida Highway Patrol troopers, requests that previously failed.
There was no question that tackling the flood insurance crisis was commissioners’ top priority.
Property owners about to renew their insurance are at risk of seeing premiums go up by as much as 20 percent, Pinellas County Property Appraiser Pam Dubov said. Premiums for people who own second homes and for businesses could go up even more. Previously, increases were capped at 10 percent.
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 stem from the 2012 Biggert-Waters Flood Insurance Reform Act, which aims to reduce the federal flood insurance program’s $20 billion deficit by phasing out so-called subsidized rates on older homes that don’t reflect their true flood risk.
The cap on increases does not apply once a home is sold or a policy lapses, meaning rates can shoot up to the highest risk rate. That is putting a brake on the real estate market that in 2013 saw overall property values increase for the first time in five years, Dubov said.
“The slowdown on sales on the beach is quantifiable,” Dubov said. “It’s a big problem for more than just the beaches.”
Brandes’ proposal would include the option for homeowners to obtain insurance only for the amount of their outstanding mortgage or to cover the whole value of the home. He said Lloyds of London already offers less expensive flood insurance.
“Private companies can come in and work below the federal rates and be successful,” Brandes said. “We need other insurers besides Lloyds.”
But not all Pinellas lawmakers agree.
“This is a federal issue that needs to be dealt with on a federal level,” said state Rep. Carl Zimmerman, a Democrat. “When that’s exhausted, then we look at what the state can do.”
As per a voter referendum, Penny for Pinellas tax dollars can be spent only on infrastructure projects. Commissioners said with so many projects now completed, the county needs to be able to use some of the money for ongoing maintenance.
Lawmakers agreed in general but said changes would have to be approved by voters when the county looks to extend the tax in 2017.
Sheriff Bob Gaultieri’s request for more FHP troopers in Pinellas comes after a recent traffic accident at the intersection of Belcher and Alderman roads, where a body lay on the road for almost two hours before FHP accident investigators arrived.
He said he has been forced to create and to pay for a traffic crash investigation unit while other counties have received more FHP resources by refusing to staff accident scenes. “We’re being penalized for providing the services to our residents,” Gaultieri said.
Republican state Sen. Jack Latvala, R-Clearwater, said this year the Pinellas delegation has members in key legislative committee positions who should be able to allocate more funding for FHP.
“They’ve gotten the message loud and clear,” Latvala said. “I think help is on the way.”