Although Congress amended the Biggert-Waters Act of 2012 in 2013 to mitigate the then significantly increased flood insurance rates in Tampa Bay, another more recent rate hike threatens to engulf the area once more.
The Biggert-Waters Act of 2012 removed subsidies on roughly 20% of policies nationwide for homes built prior to 1975 and had enjoyed grandfathered, low flood insurance rates.
According to
Tampa Bay Times, the current rate hikes are an attempt to resuscitate the National Flood Insurance Program (NFIP), which was saddled with a $23 billion deficit following Hurricane Katrina and Superstorm Sandy. It was decided that the NFIP would demand higher rates of the 20% of properties it covered located in low-lying areas that had previously enjoyed lower, subsidized rates for decades.
Owners of low-lying homes will not experience a five or six-fold increase in their rates overnight, but will see their rates increase by an average of 9% to over 20% yearly.
Several solutions to the problem have been proposed, but each has shortcomings of its own.
- The level of existing homes could be raised, but the process is typically quite costly and very impractical. As state Sen. Jeff Brandes, R-St. Petersburg, said, "How many times would you be spending more to raise a home than what it's worth?"
- Some private insurers, such as Tampa-based Homeowners Choice and Sarasota-based Centauri Insurance, have offered a limited number of private flood policies with much more reasonable rates than the NFIP. These insurers, however, are incredibly selective on who qualifies. Also, not all mortgage companies outside of Florida allow private insurance.
- Milliman consulting firm actuaries have proposed creating new flood models to allow insurers to provide targeted flood policies to owners of higher-elevated homes much more affordable than the NFIP. This, however, could take years for the industry to fully adopt.
Many are not expecting the federal government to bail Tampa Bay out of another rate hike crisis.
Pinellas County Property Appraiser Pam Dubov told
Tampa Bay Times that it is worrying that nobody seems to be complaining about the rates—enough to get the government to notice, at least.
"It's like a lot of things. If it's not staring in your face as a crisis, it's out-of-sight, out-of-mind," Dubov said.
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