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PIA of Florida Voices Support for Private Flood Insurance

Friday, March 28, 2014   (0 Comments)
Posted by: Jon Shiver
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The Professional Insurance Agents of Florida (PIA) is pleased to voice it's support for the Florida Legislature's efforts to pave the way for responsible private flood insurance in the state.

We have been closely monitoring and analyzing this legislation since it's inception, especially in light of the recent volatility in the NFIP program. While we are very pleased that Congress and the President have acted to delay some of the exorbitant increases included in the Biggert-Waters Act (BW-12), this still does not address the long-term impacts, nor does it address the fact that Florida has the highest participation rates, a very good loss ratio, and is a tremendous donor state to the program, despite the patently false accusations that NFIP does little but protect the second homes of the wealthy.

Recently, an increasing number of private market carriers have expressed interest in offering private-market alternatives to Floridians at pre-BW-12 rates. We applaud the efforts of the Legislature to foster these private markets, the ideal resource for all insurance business.

However, we as Floridians also know that shortcuts in insurance policy often have tremendously negative long-term consequences. That is why we favor the language in HB 879, which requires insured to cover the entire cost of their home rather than limit their coverage to the amount of their mortgages. While this shortcut appears that it may save consumers in their premiums, there is no evidence to support that position.

Because the bulk of the claims in Florida are not to policy maximums, the premiums are likely to be front-loaded, reducing the amount of coverage will likely have a minimal impact on premium at a tremendous cost to the public. "Allowing insureds to purchase only enough coverage for their mortgage will probably not result in meaningful savings; and moreover, while the bank will get its money - what will that insured do when there is no money to fix their house?" said PIA of Florida CEO Corey Mathews. "Sure, their mortgage is paid, but they now have a house they cannot live in, cannot repair, and cannot sell. The end result could very well be homes in these positions will cause property values to plummet and homes to be abandoned, at a significant cost to us all."

It is the goal of the PIA of Florida to assist Representative Hooper in pressing his case on the House version, in hopes that the Senate will concur. This will ensure that we continue to properly foster the budding appetite for Flood Insurance in the private market in a responsible way so that Florida's professional insurance agents can continue to protect their clients without enabling the predators that will sell consumers a policy that will leave them all wet.

PIA of Florida is a trade association representing agents throughout the state by providing its members with legislative advocacy, quality education programs, timely, unbiased information and discounted member services that gives our insurance agents the competitive edge.

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