FEMA seeks to ban insurance commission rebates
FEMA has come under fire recently in Florida after the agency decided to stop insurance companies from offering rebates to consumers who purchase flood insurance coverage. These rebates would have been garnished from the commission of insurance agents. Consumers purchasing or renewing flood insurance policies through the federal National Flood Insurance Program would have been eligible for these rebates. FEMA believes that these flood insurance rebates are a source of recent complaints consumers have been having regarding the National Flood Insurance Program.
Insurer seeks 100,000 signatures to challenge FEMA
Statewide Condominium Insurance has announced that it is protesting the stance taken by FEMA on the flood insurance rebates. The company is seeking to attain 100,000 signatures from policyholders and insurance consumers in an effort to combat the agency and its ban on rebates. Jerry Wahl, president of the company, claims that FEMA’s decision to ban rebates is a violation of state law and could mark the end of an agreement between Florida and the agency that was established in 1996. This agreement made it possible for consumers to receive flood insurance rebates.
Ban on rebates could increase the price of flood insurance
FEMA’s ban on rebates could potentially make some flood insurance policies more expensive in the state. Wahl claims that this would be particularly troublesome for consumers struggling to cope with a floundering economy. According to Wahl, Statewide Condominium Insurance has been able to return millions of dollars to consumers through rebates while promoting flood insurance. This reflects the rebates provided to consumers by a single insurance company. Many others participate in rebates throughout the state.
FEMA ban to go into effect October 1, 2012
FEMA’s ban on rebates could make flood insurance policies up to 15% more expensive. This would be compounded by the increasing prices seen in the property insurance sector. Together, these costs would put more financial strain on consumers throughout the state. The agency’s ban on rebates is set to take effect October 1, 2012, but Wahl believes he can garner enough signatures to encourage the agency to rethink its stance on the ban. Time will tell whether Wahl’s efforts succeed and what effect they have on the state’s flood insurance policies.