House postpones vote on flood insurance fix

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SARASOTA, Fla. -- Florida's flood insurance rate hikes have been the topic of conversation for months, both in Washington, D.C. and on the Suncoast. The hopes for a new bill that contains the exploding premiums hit another bump in the road today, after the House of Representatives postponed a vote on a potential fix until next week, allowing members of both parties more time to negotiate the details.

The new House bill looks to delay or reverse steep hikes in flood insurance rates, but the potential for skyrocketing premiums has homeowners living near the water on edge.

"It sure does hurt," says Andy Mele, a Siesta Key homeowner and renter. "You know, when you're sort of in a middle class range and you're in a flood zone because you want to enjoy the quality of life around here, and all of a sudden you get clobbered with these bills."

Since October of 2013, the Suncoast has seen a drastic increase in home listings. RE/MAX Alliance Managing Broker David Clapp says many homeowners can no longer afford their properties due to the insurance premiums.

"Eighty-seven new listings in the month of October," Clapp says. "For the prior 5 months it averaged 47 listings. So we almost doubled the amount of listings in that month alone."

Not only are more homes up for sale, now many potential buyers can't afford them thanks to the nearly 1000-percent spikes in insurance rates.

"When a new buyer is coming into a transaction ... they need to know that the number that's in front of them for what the previous owner paid is not going to be grandfathered [in]," Mele says. "It's going to go up."

The purpose of 2012's Biggert-Waters Act was to get the National Flood Insurance Program back on sound financial footing -- but that balancing of the books was done through cuts in federal subsidies for homeowners. Those cuts caused premiums to rise -- dramatically in many cases.

"We've seen some go from $700 to as high as $20,000 and more for flood insurance," Clapp says. "Buyers can't sustain that."

Both homeowners and realtors alike see the necessity for the corrective bill to be passed.

"There's been a 1000-percent increase. What's good about the new bill is it will limit that increase to 15 percent," Clapp says.