Gov. Rick Scott dropped in for a visit at a Worth Ave. shopping mall to talk about stopping big increases in flood insurance costs Thursday.
“Families can’t wait,” Scott said. “We need to get less talk out of Washington and more action out of Washington.”
Scott talked with shoppers outside businesses including a Starbucks and a yacht sales office, calling on President Barack Obama to stop “unreasonable” rate increases in the National Flood Insurance Program under the Biggert-Waters Act passed by Congress in 2012.
“Right here it’s happening with the flood we saw last week,” Scott said, referring to rains that swamped parts of Boynton Beach and Delray Beach.
State Rep. Irv Slosberg, D-Boca Raton, had asked the Republican governor to visit flooded areas and declare a state of emergency, though Scott said Thursday it is up to the state’s Division of Emergency Management to decide what areas qualify for aid.
The GOP-controlled U.S. House is widely seen as the main barrier to passage of a bill to delay big flood insurance premium increases four years, panelists at an industry conference Scott attended last week said. Scott’s office said late last week he invited House Speaker John Boehner to join a discussion with the president, but Obama has not responded to Scott’s invitation issued more than a week ago.
A White House spokesman referred questions to the Federal Emergency Management Agency, whose spokesman noted FEMA adminstrator Craig Fugate recently talked to Congress about “a lack of flexibility within Biggert-Waters for administrative delays or changes.”
The Palm Beach setting for Scott’s remarks on flood insurance was not entirely unnoticed by groups who want to get rid of subsidies they say disproportionately benefit the well-to-do. One group, the R Street Institute in Washington, D.C., has urged Congress not to “subsidize beach homes for the wealthy.”
Realtors and others who want to stop flood insurance increases say they paralyze real estate markets and hurt the economy. Those affected include plenty of moderate-income folks, they say, with premiums in some cases jumping overnight from about $4,000 to more than $40,000. That effectively traps some people in their homes, unable to afford flood insurance or to find a buyer willing to pay it.
In any case, the town of Palm Beach has more than 1,900 of the nearly 5,000 properties in Palm Beach County subject to the sharpest increases in flood insurance rates, government figures show.
“We’re disappointed with the stance Gov. Scott is taking but we understand why he’s taking it,” said R Street senior fellow R.J. Lehmann on Thursday. “He’s got a big election this year.”
Lehmann said donors to his public-policy research group include insurance companies, though the organization does not list specific contributors.
Insurance industry interests have backed bills filed in the Florida legislature that would make it easier for private insurers to write flood policies. On Thursday, Homeowners Choice Property & Casualty Insurance Co. of Tampa signed what it called the first private flood insurance policy offered by an “admitted” Florida carrier since the Biggert-Waters Act took effect. Admitted carriers have their rates regulated by the state.
Also interested in more favorable terms to write flood policies in Florida are lightly regulated “surplus lines” insurers, who can raise rates at will and are not backed by a government fund to pay claims if the insurer fails to do so.
The National Flood Insurance Program, a federal program created in 1968, provides flood insurance to 5.6 million policyholders across the country. About two in five homes it covers are in Florida. Approximately four out of five policyholders pay full rates now, but much of the fuss in Congress is about the 20 percent of policies across the country that are losing subsidized rates as part of a plan to help the program get out of $25 billion in debt.
Another issue in play is the redrawing of federal maps that could force more property owners to buy flood insurance. Western communities in Palm Beach County are making the case they shouldn’t be marked as high-risk areas, though early versions of new maps appeared to do so. In a spending bill, Congress approved what amounts to a one-year delay on rate increases for remapped homes.
Supporters in the U.S. Senate said last week they expect to pass a bill to delay all flood insurance increases four years while a federal agency conducts an affordabilty study, though Florida Democratic Sen. Bill Nelson said the House is another story.