TALLAHASSEE — It's unclear whether lawmakers will pass a comprehensive flood insurance overhaul this year as the Florida House and Senate continue to disagree over a key provision.
By a 98-11 vote, the House on Monday passed a measure (SB 542) aimed at ensuring less costly residential flood insurance by encouraging more private companies to offer policies in the state.
But the House changed the bill before sending it back to the Senate. Assuming the legislative session ends on time, both chambers have until Friday to agree on identical language.
House lawmakers, concerned about adequate coverage levels, have been hung up on a provision that gives homeowners the ability to choose their level of coverage. Their version requires coverage of the full replacement cost of a home.
The Senate had wanted flexibility, allowing consumers to insure only a home's mortgage value, for example, or just the main structure and not outlying structures such as carports.
Hanging over all this is the uncertainty that private insurers will be any less expensive for Floridians than the National Flood Insurance Program, which is backed by the federal government. The state makes up roughly one-third of its customers.
Moreover, the pressure for state lawmakers to act has eased since Congress agreed to hold off sudden, drastic rate hikes on policyholders.
That relief, however, won't last forever. The national program is $24 billion short and needs to start charging actuarially sound rates, meaning total premiums collected should be more than total claims paid out every year.
In other words, instead of one big hit, policyholders can expect smaller but regular increases in their bill.
With the rate increases staved off, Rep. Kevin Rader, D-Delray Beach, argued against the state getting involved at all.
“We don't need this bill to move forward,” he said.
Regarding opening up flood insurance to the private market, Rader said, “I don't think that's good … I greatly caution you not to purchase these policies” because they're not guaranteed by the feds.
Rep. Ed Hooper, R-Clearwater, said the bill gets “government off our backs.” For every $3.60 the state pays into the federal program, it gets back $1 in claims, he said.
Six “admitted carriers,” insurers regulated by the state, are eligible to write residential flood insurance in Florida, and one — Lloyd's — can offer it as a “surplus-lines” company. Such insurers are generally not regulated by the state but are allowed to do business here.
Another 10 companies offer excess flood insurance, or additional coverage over what the federal program offers.
The House bill also expands the definition of what a “flood” is. It would allow claims for damages when the ground erodes because of water intrusion.