It’s been six months since the last hurricane hit Central Florida, and many communities are still cleaning up. On top of that, they’re seeing major insurance cost hikes — and the latest hit will be flood insurance.
Based on FEMA’s latest estimates, about 80% of Florida residents who have flood insurance will see their premiums hike over the next few years, but on Central Florida’s coast, many property owners will be taking the biggest hits in the state.
“Raising rates to actuarily sound levels is not a politically popular thing to do, but the changes you’re seeing are moves towards more actuarily sound rates,” said Tom Cotton with Hugh Cotton Insurance.
Cotton said the new estimates for federal flood insurance are diving deeper into location specifics. FEMA just released its estimates under its new system called “Risk Rating 2.0″ to calculate premiums.
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“Certainly with development changes, areas that may not have previously been prone to flooding may now be prone to flooding,” Cotton said.
Before, FEMA used old flood zone maps to estimate but now it’s basing it on property factors including rainfall levels, distance to the ocean and cost to rebuild.
FEMA uses zip codes to give estimates.
News 6 took the agency’s new data and broke down the numbers across Central Florida’s zip codes.
Those under federal flood insurance here will see a range of a $977 average increase to an almost $6,000 average increase. Brevard County has five of the top ten zip codes in the state that will see the biggest hikes.
It won’t happen all at once for renewing policyholders.
“Rather than them just turning the switch and making the rates actuarily sound, they’ll do what they call, ‘Glide path rating,’” Cotton said.
The rate increases are capped at 18% per year until it reaches the new calculation for your house.
However, Cotton said those who are just now purchasing flood insurance will see the new premium all at once.
“At the end of the day, the rates that they’ve been charging for decades are inadequate to fund the losses that they’re paying,” he said.
After Hurricane Ian, there were over 42,800 flood claims from Florida residents. Cotton said these new premium estimates shouldn’t be a deterrent for those who want to get flood insurance, especially for those who didn’t have it after last year’s hurricanes and got flooded.
“Just because the realtor or the banker says you don’t need flood insurance, doesn’t mean you’re not going to have a flood,” he said.
Not everyone will see the hike under these new estimates. According to the data, about 20% of Florida residents will actually see their rates drop.
Some U.S. senators are fighting against all of this because of the amount Florida already pays compared to other states.
Sen. Rick Scott sent News 6 the following statement:
“The national flood insurance program is a perfect example of what happens when government tries to take over an industry – it fails. The NFIP is not only buried in debt, it’s now pushing huge rate increases through FEMA’s new ‘risk rating 2.0’ that is unsustainable and unaffordable for Florida families. Right now, Florida is a donor state that pays more into the flood insurance system than is paid out, which unfairly impacts all Floridians. It makes no sense that residents of a donor state should see their premiums increase. I will be reintroducing my flood insurance reform package that includes bills to help promote consumer choice, transparency and competition within the program so that Floridians can get the best possible policy that fits their needs.”Sen. Rick Scott
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