Florida homeowners will be hit with double-digit rate increases later this year
Flood insurance rates in Florida are set to increase yet again. Thousands of homeowners throughout the state are likely to see higher rates in the coming months as the National Flood Insurance Program continues to raise rates throughout the country. These rates are based on flood maps devised by FEMA. The federal agency has been making revisions to these flood maps recently in order to better account for the changing risks associated with natural disasters and provide insurance entities a better understanding of these risks.
Flood protection rates set to rise by an average of 18%, and 25% for those with second homes
The state’s insurance regulators suggest that homeowners living in their homes could see rates grow by an average of 18% this fall, while those with second homes and rental properties could see rates rise by an average of 25%. Homeowners in Florida have been hit by double-digit rate increases in the past and their concerns were enough to get Congress to take action on the growing cost of flood protection. This action, however, seems to be having relatively little impact.
Florida continues to try and privatize the flood market
Florida has been working to open itself up to private insurance companies interested in offering flood protection. The state has been sluggish in getting such an initiative off the ground, however, despite the potential profit that exists in the flood market. Regulators suggest that Florida pays $4 for every dollar it receives in claims, whereas other states pay 20 cents. This makes Florida a somewhat attractive market to insurance companies that are willing to take on the risks of flood damage.
Few insurers are showing interest in offering flood protection in the state
On July 1, Florida lawmakers approved plans to allow private companies to provide flood insurance coverage. Under state law, these companies can charge whatever they consider to be reasonable for this coverage without first receiving approval from state regulators. Few insurance companies have taken the bait, however, leaving the market firmly in the hands of the National Flood Insurance Program.