Flood Insurance Fix? Against the backdrop of the government shutdown, state leaders in early October began a full-court press for the federal government to postpone significant rate- insurance hikes.
Gov. Rick Scott fired the first shot in an Oct. 1 news conference in Clearwater, where he said: “We are calling on President Obama to take immediate action to prevent these flood insurance hikes on Florida’s families. This is unfair and could devastate the Tampa Bay area’s real estate market.”
Scott was joined by St. Petersburg Mayor Bill Foster, state Sens. Jeff Brandes, R-St. Petersburg, and Jack Latvala, R-Clearwater, as well as other state lawmakers and local officials. At the news conference, Latvala said, “It’s a problem that needs to be addressed by the federal government now—and not later.”
The shutdown undoubtedly delayed action, but it appears Scott and his colleagues’ pleas may be answered. On Oct. 26, Rep. Maxine Waters, R-Calif., announced a bipartisan deal to delay the rate hikes called for in legislation the congresswoman had passed earlier. Calling the ill-effects of that bill “unintended consequences,” Waters indicated the bipartisan compromise would include a four-year delay in most rate increases.
￼The crisis was triggered by the passage of Waters’ 2012 bill reforming the National Flood Insurance Program (NFIP), the sole provider of flood insurance. Seen as critical last year because the NFIP was $18 billion in debt, with about $15 billion of that debt coming from the damage caused by 2005 Hurricanes Katrina and Rita. To address the problem, last year’s bill cut off federal NFIP subsidies to some 430,000 policyholders immediately, and another 715,000 policyholders’ subsidies were set to be phased out.
Waters indicated new legislation would be circulated in the House and Senate the last week of October in hopes that the legislation could be passed quickly by both chambers.