Clock ticking to reform flood insurance

Written by eliearaj on . Posted in News

Congress finally could be forced to make fundamental changes to the federal flood insurance program this summer, and Floridians could be unfairly treated and face soaring premiums unless the conversation changes. Florida homeowners have paid far more than their share in premiums, and the rush to raise costs even higher is out of proportion to Tampa Bay property values. The state’s congressional delegation should take a leading role in pushing for more reasonable changes, and there isn’t much time.

The reason for the newfound urgency can be found in the spending bill signed into law last week by President Donald Trump. Congress has routinely kept the National Flood Insurance Program going by tying its fate to spending bills that have to be passed to keep the federal government running. But this time, lawmakers funded the government through Sept. 30 but extended the flood insurance program only through July 31. That means the pressure is on to overhaul the program within the next four months or risk it going out of business at least temporarily.

Nobody wants that to happen. If the program lapsed, the Federal Emergency Management Agency would stop selling and renewing policies across Florida and the nation. That would paralyze the real estate market in Tampa Bay, because homes in neighborhoods where flood insurance is required for federally backed mortgages could not be bought or sold. Nationwide, the National Association of Realtors calculates about 40,000 home closings a month could be affected if federal flood insurance isn’t available.

Yet changes to the flood insurance program approved by the House in November and awaiting action by the Senate are untenable for Floridians. The legislation would raise the minimum increase in flood insurance premiums on homes built at least 43 years ago, or before modern flood maps were drawn, by 60 percent. The nonpartisan Congressional Budget Office estimates that would affect 330,000 homes nationwide, and that would include thousands of older Tampa Bay homes that are far from being mansions. The legislation also would increase other fees and surcharges, and the CBO says overall premiums for flood insurance would go up while the number of homes covered would go down. That flies in the face of a basic tenet of insurance: spreading the risk.

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