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Rooney talks flood insurance with Chamber

August 16, 2017
Jessica Salmond - News Editor ( , Fort Myers Beach Bulletin, Fort Myers Beach Observer

With reauthorization of the National Flood Insurance Program (NFIP) set for Sept. 30 and no replacement plan currently approved, Fort Myers Beach businesses and homeowners are getting nervous for premium hikes.

District 19 Representative Francis Rooney spoke to the membership of the Fort Myers Beach Chamber of Commerce Thursday, focusing much of the conversation on the NFIP.

One of the biggest fears is a hike in premiums again.

Article Photos

District 19 U.S. Representative Francis Rooney spoke to the Fort Myers Beach Chamber of Commerce during its August luncheon at Charley's Boathouse.

"Jacki is the poster child for how bad it can be," Rooney said of Jacki Liszak, Chamber president.

In coastal areas of Florida, all homeowners with a mortgage are required to obtain flood insurance. These premiums feed into the National Flood Insurance Program (NFIP), which pays out when properties are destroyed from a flood.

Currently the NFIP is managed by the federal government, as private insurers pulled out of the program years ago. The insurance program has a federal "backstock," or a pot of money the premiums pay into. There are very few private-sector insurance companies that sell flood insurance, so most buyers go through the federal system.

More than five years ago, the Biggert-Waters Act was passed that removed subsidized rates from the NFIP. Liszak's insurance bill for two buildings on $180,000 worth of insurance was $2,700 a year; the act spiked it to $47,000 per year on her small, historic hotel on the beach, the Sea Gypsy Inn.The number came from the actuarial rate, which quantifies the risk of flooding for her property. The actuarial rate said her property floods every three years, but Liszak said she doesn't even have a flood-out of the Sea Gypsy on record.

"It was crazy," she said.

With such an astronomical increase, she and other homeowners and businesses were "freaking out," she said.

"People were losing businesses and homes," she said. "A huge outcry went up and got rid of the Waters Act."

Biggert-Waters was repealed and in its place a temporary reform program was approved that lowered rates back to what they were before, but increased those rates by 25 percent a year. Liszak's flood insurance cost is $7,000 a year now, she said. The reform bill had a sunset date, and in the meantime legislators were supposed to come up with a more permanent solution.

That sunset date is September 2017, and no replacement has been approved.

"No one did anything, and now people are worried about returning back to super high rates," Liszak said.

If a new plan isn't approved by the deadline, the NFIP will be reauthorized using the actuarial rates and people's flood insurance bills will once again skyrocket.

* Work has been done in a committee of the U.S. House of Representatives to come up with a new bill; the resulting legislation will go to the House and the Senate for approval.

It hasn't been an easy course of action.

Rooney said a representative from Wisconsin suggested prohibiting any development on the coast to eliminate the problem - a solution that Florida Republicans and Democrats alike stood up and said no.

"I told him, many of these people saved up their whole life to move here," Rooney said.

Rooney's biggest issue with the NFIP is repetitive loss properties. This is property that is in an area that floods frequently.

Florida is not the biggest contributor to these properties; its states with lots of lakes and rivers that flood seasonally. However, Florida contributes heavily to the federal backstock, which pays out more frequently to the repetitive loss properties.

"They need to be dealt with differently," Rooney said.

Rooney also discussed the funding in progress for the Comprehensive Everglades Restoration Program (CERP) and the Herbert Hoover dike at Lake Okeechobee and took questions from the membership.

* Correction: An earlier version of this story incorrectly stated the current status of a new bill. The bill has not passed in the House; it is still in committee. We apologize for this error.



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