NCPA - National Center for Policy Analysis

Florida's Approach to Flood Insurance Reform

November 15, 2013

With various provisions of the Biggert-Waters Flood Insurance Reform Act of 2012 taking effect this year, there is growing concern that scheduled rate increases by the National Flood Insurance Program (NFIP) will have an adverse effect on hundreds of thousands of Floridians who must carry flood coverage. Elected officials at the local, state and federal levels have already called for a delay in the implementation of the rate increases, and the Florida Cabinet and Legislature have both convened hearings and workshops to discuss the reforms, their potential effects and what, if anything the state could do to temper the law's negative impacts, says Christian R. Cámara, an R Street Institute co-founder and the Florida director.

The best solution to this problem is to offer consumers more choices, rather than halting changes to the program, which most agree are necessary. As Florida lawmakers work to find solutions to alleviate the impact on NFIP reforms, they should take the following principles into consideration:

  • No proposal should foist additional catastrophe risk onto the state's taxpayers. Florida taxpayers should not be encumbered with the possibility of covering any more risk, especially risk that does not necessarily belong to them.
  • No proposal should increase state government's role in insurance. Any proposal that calls for the creation of a "state flood pool" or "fund," or the expansion of any existing state-run insurance entity to cover flood should be rejected even if it is crafted to be "self-sufficient."
  • No proposal should stifle competition; it should expand it. Lawmakers should explore ways to establish a regulatory environment where private companies might consider offering flood coverage in Florida as an alternative to the NFIP by lifting the barriers to private sector innovation, which should include streamlining rate and form regulation.

Quite simply, the NFIP cannot continue without the reforms contained in the Biggert-Waters Act. Indeed, the program already owes the Treasury more than $25 billion that it has no practical way of paying back, so without these reforms, it simply will not be able to go on providing coverage to the 5.6 million Americans and thousands of communities that depend on it.

Source: Christian R. Cámara, "A State Approach to Flood Insurance Reform in Florida," R Street Institute, Fall 2013.


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