Flood insurance rates drowning some while state looks for answers

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SARASOTA COUNTY, FL - New federal flood insurance guidelines has some in our area already seeing skyrocketing costs. Real estate experts say it could make some homes un-sellable. Meanwhile state officials are talking about options. Including the possibility of opting out of the federal insurance program.

Venice realtor Dan Heschmeyer is worried. "It's a big concern. The whole industry is lit up about it." As of October 1st there are big changes to policies in the federally run flood insurance program. Homes built before 1975 and not elevated above flood level are at a greater risk of seeing huge increases. Secondary homes and those bought after July 6th of last year too. "Some rates are four or five times as much as they were just two weeks ago. Somebody who has been paying maybe $1,200 a year who lives in an 'A' flood zone maybe paying $4,500 to $5,000 a year just for flood insurance."

Pricing people out of their own home. As the housing market looks to bounce back it can also keep others from wanting to buy them. "It is scary that some homes might not be sellable."

The State Senate Committee on Banking and Insurance picking up the issue, "There is such a big disparity of what we pay in to the national flood insurance program to what our citizens are taking out," said Senator David Simmons.

Florida has around 40% of the nations policies. Paying out nearly four times what it gets back in claims. That has other senators on the committee raising the question of opting out the federal program. "Is it entirely unfeasible for Florida to start its own program?"

Of course that sounds similar to Citizens home and wind policies which the insurance industry and many state leaders have pushed to reduce. Local senator Nancy Detert is on the committee but said it was too early to discuss. Senator Gwen Margolis says it seems similar. "Let me tell you because I was there. This is exactly how citizens started."

"I don't think the state wants to continually get back into the insurance business," says Heschmeyer.

Until something is figured out it's believed about 30,000 policies in just Manatee and Sarasota county alone which includes businesses will see sharp increases. Many others could see upticks in the neighborhood of 25% a year. Making a Citizens like scenario seem reasonable. "It might have to be done. There might not be another option."

One other solution is for private insurance companies in the state to start writing their own flood insurance policies at a more reasonable rate.

Senator Detert says right now more than half of the concerns and complaints she gets from constituents are insurance related. The Committee on Banking and Insurance will meet again and discuss the topic in early November.