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Florida's federal flood insurance policies are drying up

Florida has more flood policies than any other state in the country. However, it appears that coverage in the aptly named Sunshine State is dwindling -- more than 13 percent this fall when compared to six years ago. That equates to almost 300,000 policies. The loss in flood insurance policies during the same time across the country is around 8 percent or over 400,000 policies.

What's to blame for the loss? According to state Senator Jeff Brandes, R-St. Petersburg, the added surcharges and raise in policy costs were supposed to get the National Flood Insurance Program out of debt. Sen. Brandes said, "It absolutely backfired. If you raise the price of a product, people will buy less of the product."

The Federal Emergency Management Agency found that the policy lapses appear to be because of the recent increase in rates. Many property owners who have a choice on whether to buy flood policies or not are deciding against it. What does this mean for taxpayers? It means that there will be fewer people who will have to be paid after a disaster from the flood program. Unfortunately, it also means that less money is coming into the program.

For many years, consumers have been reminded that their regular homeowner policies don't cover damage from floods. Florida homeowners, though, have paid billions more in flood insurance premiums than those who live in other states. However, less than 30 percent comes back to cover flood damage claims.

A focus-group study done by federal officials found that many homeowners are comfortable with a $600 to $700 annual premium. Higher risk areas can see premiums much higher. Those homeowners with a choice are often turning away from flood policies when the rates go up.

When the Biggert-Waters Act of 2012 passed, some homes in Florida were hit with overnight rate increases -- some almost as high as a 1,000 percent increase. A rewrite of the act last year caps the rate increases at 18 percent for policyholders' primary homes. Senator Brandes has sponsored legislation that would allow private insurers to offer more flood insurance policies. This type of legislation is also being pushed at the federal level.

When it comes to a claim on your flood insurance, do you know if yours will be paid out? An experienced attorney can help file your claim and deal with denied or appealed claims, as well.

Source: The Palm Beach Post, "Florida leads U.S. dive in flood policies after Congress ups costs," Charles Elmore, Nov. 18, 2015

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