Florida lawmakers seek to open up the market to private insurers
Flood insurance rates may remain stable in the U.S. for a time as federal lawmakers begin investigating ways to reform the federal program that provides flood protection, but many homeowners are still concerned about the financial impact of flood coverage and the federal program’s ability to actually honor the policies it represents. The National Flood Insurance Program is currently crippled by massive debt. While the program has been able to pay claims thanks to the support of emergency spending initiatives from Congress, paying these claims has been a slow process that has left many people stuck in a sort of limbo when it comes to damage done to the properties by flood disasters.
Coastal states suffering from financial pressure due to federal program’s faults
In Florida, lawmakers are beginning to grow weary of the National Flood Insurance Program. As such, they are beginning to turn to private insurance companies. Private companies have, traditionally, avoided providing flood protection in coastal states because of the financial risks associated with these territories. States like Florida, Mississippi, and Louisiana have an infamous history with natural disasters that produce catastrophic flooding. Most private insurers are not eager to take on the financial risks associated with floods.
Legislation seeks to make it possible for private insurers to offer flood protection to homeowners
State lawmakers have been debating on a proposal that would open up Florida’s flood insurance market. Senate Bill 542 aims to make it possible for private insurers to provide flood protection to property owners. Per the legislation, homeowners would be able to negotiate premiums of flood protection with insurers. Insurers would only need to provide coverage for principle buildings and would not provide coverage for commercial property. Insurance protection would be limited to the amount of a homeowner’s outstanding mortgage and all negotiations between homeowners and insurers would need the approval of the state’s Office of Insurance Regulation.
Legislation may soon have the support it needs to become law
Senate Bill 542 has undergone several changes since it was introduced, but supporters of the legislation suggest that it is close to winning the approval it needs to become law. Florida Governor Rick Scott has issued harsh criticism against the federal government’s inability to resolve the issues that exist with the National Flood Insurance Program, suggesting that the state’s homeowners are being placed under unnecessarily financial strain because of the federal program’s faults.