The year National Flood Insurance Program was established in the U.S.

$24 billion

The amount of NFIP debt as of March 2017.


The number of NFIP policies nationwide


The number of NFIP policies in Florida


The number of NFIP policies in Monroe County

Worst example

For a pre-FIRM home (built before the existence of a community flood map) that is not a primary residence, rates can increase by up to 18% a year. Homeowners will also owe increased fees.


The maximum payout of a NFIP policy, no matter the size or cost of a home.


Of the NFIP claims paid last year, 4 out of 5 of the billion-dollar floods occurred inland, not on the coast.

WYO policies

WYO, or Write Your Own, policies refer to the practice of private insurance companies that write NFIP policies. Agents receive an administration fee, but losses are backed by the federal government.


While most of the national news is focused on changes to health insurance, there is a looming issue with flood insurance likely to affect Monroe County homeowners even more. The current incarnation of the National Flood Insurance Program expires on Sept. 30 — in two months.

The stakes are high.

Currently, there are competing ideologies and attending bills making their way through the process. The first set comes out of the House Financial Services Committee, commonly referred to as the Duffy-Hensarling bill, which is actually a collection of about seven bills.

“It is not as favorable to us as the SAFE NFIP bill, but it is improving,” said U.S. Rep. Carlos Curbelo (R-FL), Keys representative. “It is important to continue working on this bill because it’s the one that has the best stage for getting out of the House. But the reauthorization of the program should be priority No. 1, no matter what your position is.”

The SAFE NFIP bill is sponsored by U.S. Sen. Bob Menendez (D-N.J.) and Sen. Marco Rubio (R-FL) among others; Curbelo signed on to a companion bill in the House. It would cap rate increases to 10 percent annually and provide funding for communitywide mitigation efforts as well as low-interest loans to homeowners to make their homes flood-resistant. There is also $800 million to provide new, consistent mapping. Most importantly to the Keys, perhaps, is the promise to extend “grandfathering” of flood zones (not rates) during re-mapping of flood zones.

The Duffy-Hensarling measure calls for rate increases, encourages private insurance companies to offer flood insurance, and would eliminate eligibility for NFIP participation for new construction. But it has some proposed amendments as expressed by 26 Republicans who signed a letter addressed to the House Financial Services Committee. They hope to ensure a NFIP bill that spreads increases of 5.5 percent to 6.5 percent over a four-year period, and keep grandfathering.

Another bill, the Flood Insurance Fairness Act, co-authored by Curbelo and Rep. Charlie Crist (D-FL), focuses primarily on leveling the playing field for primary homes, non-primary homes and commercial properties. Rep. Curbelo said that would extend to rental properties and help keep affordable housing costs in check.

Lisa Tennyson, the legislative affairs officer for Monroe County, is currently in Washington, D.C. meeting with Florida’s congressional delegation to impress upon them the importance of this legislation. (Earlier in the week she and Monroe County Commissioner Heather Carruthers attended the National Association of Counties to discuss the same issue.)

“We need to talk to the representatives of these Florida districts to rally the troops,” she said. “The SAFE NFIP bill is really protective and has bipartisan support.” She said Curbelo deserves credit for the amount of work he has done on the issue.

Mel Montagne, president of FIRM (Fair Insurance Rates in Monroe) said none of the bills is particularly good news for Monroe County. “On the national level, the opposition is of the opinion that if we are gong to build on the coast, we must pay a pretty penny for it.” Any more rate hikes, Montagne said, would be excessive as Florida only receives a very small portion of the claims of what it pays in premiums. “We are a donor state, a funding source for this national program.”

The most recent incarnation of the NFIP is the Biggert-Waters Flood Insurance Reform Act of 2012. It increased premiums for second homes and commercial properties, a hard pill to swallow for the Keys — an investment-rich community in terms of real estate holdings. The effects of the Biggert-Waters act were partially stayed by the Homeowner Flood Insurance Affordability Act in 2014. It delayed premium increases and reinstated grandfathering.

If a new bill is not passed before the Sept. 30 deadline, the nation’s coastal real estate industry could grind to a halt. It happened in 2010 most recently. Key West Realtor Bascom Grooms remembers it, vaguely.

“I think it delayed some closings, but it wasn’t a big deal. I think they filed an extension pretty quickly because of the ramifications it had on the real estate industry,” Grooms said. With no new NFIP policies being written, it would have an effect on almost every buyer except cash buyers. (Lenders require flood insurance to protect the investment.)

Grooms said he has no concerns about the privatization of flood insurance, but it’s a big debate on The Hill. He likens it to the private wind insurers who entered the market a few years ago, a counter-balance to the state-backed Citizens Property Insurance. Curbelo said he supports private insurance offering flood policies.

“This is the only opportunity that residents will have of seeing a premium decrease. If you’re in NFIP, your premium is going to go up no matter what — it’s just a matter of how much. If we open this to the private insurance companies, while keeping NFIP as a guaranteed option,” it may be better for residents, Rep. Curbelo said. “It doesn’t hurt to try because we are keeping up that NFIP for everyone. We should open up the market and see how it goes.”

Montagne and others worry that a slimmer NFIP customer base (made smaller by homeowners who switch to private insurance) will make the program less stable than it is now.

“Private flood insurance options would, in all likelihood, not benefit Monroe County as private flood markets seem to be risk averse and will only select the least flood prone properties, leaving the NFIP with the more flood-prone properties and therefore exacerbating an already growing deficit.”

Join Our Blast – Keys News Right to Your INBOX

Leave a Reply