On March 26, 2014 the Florida Senate unanimously passed a bill (Senate Bill 542) to encourage a private flood insurance market. The bill is at a time where there are concerns over the National Flood Insurance Program ("NFIP") changes that will be increasing premiums for policyholders in flood prone areas. The bill has been discussed before in my previous post, Will Floridians Have An Option To Obtain Affordable Flood Insurance Coverage From Private Insurers?

The bill creates an alternative to the NFIP by authorizing private companies to write residential flood insurance that had previously only been available through the federally subsidized program or a surplus lines carrier, such as Lloyds. Many have been concerned over premium increases under the NFIP as of late. Congress enacted a measure to delay the most expensive changes to the Bigger-Waters Flood Insurance Reform Act, but Congress did not repeal them. The premium increases will be phased in over time.

Under Senate Bill 542, policyholders have the option of covering either the outstanding balance of their mortgage, the replacement cost of their property, or the actual cash value of their property. The thought is that consumers can have some options to select what they think is best suited for their needs in this flood insurance market.

Also under the bill, insurance companies could offer various deductible amounts and could give homeowners more options for covering contents, living expenses, and secondary structures. The insurance plans would have to be approved by the Office of Insurance Regulation.

At the time of this article, there are only a couple of private insurers writing flood policies in Florida: Homeowners Choice Property & Casualty Insurance Company Inc. and The Flood Insurance Agency. This is no guarantee that any private insurers interested in entering the flood insurance market in Florida would offer rates, particularly in all flood zones, lower than what consumers currently have available through the NFIP. We will continue to monitor and provide updates on this important topic.