Florida Flood Insurance
Update
Presented By:
HH Insurance Group
Meet your speaker
• Bachelor’s Degree in Risk Management and Insurance – Florida State
University
• Master’s Degree in Risk Management and Insurance – F
lorida State
University
• Chartered Property and Casualty Underwriter (CPCU) Designation
• City of St. Petersburg, City of St. Pete Beach, City of Treasure Island
a
nd Pinellas County Appointed Flood Insurance Advocate
• President of HH Insurance
What is Happening With Flood Insurance?
• What is the NFIP?
• History of the NFIP
• Flood Map Change vs NFIP Rating Change
• 1975 – 2021 NFIP Flood Rates
• 2021 - ? NFIP Flood Rates
• Private Flood Marketplace
• Rate Examples
Flood Maps Changes
• Pinellas County Flood Maps
• All Homes Built 1975 or newer have been built to a flood map requirement
• History of Maps
• First Published – 06/10/1977
• Second Map – 0
9/30/1983
• Third Map – 0
9/03/2003
• Fourth Map
• Preliminary Maps – 07/26/2018
• Fourth Map – 08/
24/2021
• Major Risk Reduction for Coastal Pinellas County
• Risk Rating 2.0
• Soft Launch – 10/01/2021
• Hard Launch – 04/
01/2022
The National Flood Insurance Program (NFIP)
• Most flood insurance coverage is rated in the NFIP program
• The NFIP has a rate for just about every flood policy except for CBRA
f
lood zones
• Prior to October 1, 2021 - F
rom a rate standpoint, the NFIP is the
most competitive option on about 60% of Florida risks and the private
market is the most competitive on about 40% of the market
• After October 1, 2021 over the next 5 years – I
expect that 90% of
flood policies in Florida will be issued in the private market
How did we get here with the NFIP?
This is How
Substantial Flood Events from January 2005 - January 2012
Event Month/Year # Pd Losses Amount Pd $
Hurricane Dennis July – 2005 3,804 $119,703,846
Hurricane Katrina August -2005 167,694 $16,271,802,748
Hurricane Rita September – 2005 9,491 $470,142,386
Hurricane Wilma October -2005 9,615 $365,061,170
PA, NJ, NY Floods June 2006 June – 2006 6,420 $228,414,752
Nor'Easter April 2007 April – 2007 8,637 $225,653,493
Torrential Rain June 2008 June – 2008 3,352 $140,412,289
Hurricane Gustav September – 2008 4,536 $112,049,118
Hurricane Ike September – 2008 46,288 $2,644,120,863
Torrential Rain March 2009 TX March – 2009 3,300 $127,405,094
Torrential Rain Sept 2009 GA September - 2009 2,031 $118,154,178
Tropical Storm Ida VA November – 2009 5,654 $101,500,557
Nor'Easter March – 2010 10,082 $194,252,641
Torrential Rains TN April – 2010 4,091 $225,500,584
Mid-Spring Storms April – 2011 3,427 $114,469,581
Hurricane Irene August – 2011 40,634 $1,111,581,148
Tropical Storm Lee September – 2011 8,961 $360,586,593
Tropical Storm Debbie June – 2012 1,778 $41,539,591
Tropical Storm Isaac August – 2012 11,915 $533,401,256
Superstorm
Sandy October – 2012 126,895 $7,117,422,012
Hurricane Katrina
Hurricane Ike
Hurricane Irene
NFIP Recent Program History
• Biggert-Waters Act of 2012
• Signed into law July 6, 2012
• Intent of the Act
• Phasing out subsidies for many properties;
• Raising the cap on annual premium increases from 10 percent to 20 percent;
• Allowing owners of multifamily properties to purchase NFIP policies;
• Imposing minimum deductibles for flood claims;
• Requiring the NFIP administrator to develop a plan for repaying the debt incurred
f
rom Hurricane Katrina; and
•
Establishing a technical mapping advisory council to deal with map modernization
issues.
• Actual Act
• October 1, 2013 – Slab on Grade homes have rates skyrocket to $10,000 per year
• Private Market Flood Programs emerge as an affordable alterative
• Removed Grandfathering and the transfer of flood policies
NFIP Recent Program History
• Homeowner Flood Insurance Affordability Act of 2014
• Signed into law March 21, 2014
• Repealed certain parts of Biggert-Waters
• Restoring Grandfathering
• Pu
tting limits on certain rate increases
• Updating the approach to ensuring the fiscal soundness of the fund by applying an
a
nnual surcharge to all policyholders.
• We are still operating under the HFIAA of 2014 in terms flood insurance
regulation
NFIP Renewal
• Separate from Risk Rating 2.0
• Believe it or not – It has been over 9 years since the Biggert-Waters
Act was passed and 5 years since it went to effect. This means that
the NFIP is due for a renewal
• For approximately the last three years, the NFIP has essentially been
r
unning on a month to month basis waiting for a long term extension
• The NFIP is currently authorized to run until September 30, 2021
NFIP Essential Needs
• The essential part of getting the NFIP renewed is a long term bill that
provides 5 to 7 years of protection
•
The second essential part of getting the NFIP renewed is preserving
grandfathering
• Grandfathering is what allows areas where a map change has occurred to
have flood rates in the $1,000 range when the rates should be closer to
$2,500 based on today’s and future maps
Grandfathering
• Built in Compliance
• Any structure built after the municipalities FIRM (Flood Insurance Rate Map) date that
was built in compliance of flood insurance codes at the time of construction is eligible
for grandfathering
• Essentially this means that if a house was built in 2000 to an 8 foot base flood
e
levation, and the map change negatively affects the home, this house is able to
maintain their current flood insurance rate
• Continuous Coverage
• Any structure that has maintained a FEMA flood insurance policy is not subject to
flood zone changes or base flood elevation changes from a flood insurance rating
standpoint if they have maintained continuous flood coverage
• While this does help the pre-
FIRM structures, it does not stop the mandatory 15% to
18% rate increases on pre-FIRM primary homes
Missing Grandfathering
Flood Risk 2.0
• The National Flood Insurance Program (NFIP) has redesigned its risk rating plan to charge more for coastal
risks and less for non-coastal risks through a program called Risk Rating 2.0
•
This the first change to FEMA rating methodology since 1975
• Risk Rating 2.0 fundamentally changes the way FEMA rates a property’s flood risk and prices insurance.
• Risk Rating 1.0 FEMA develops rates based predominantly on Flood Insurance Rate Map zone and Base Flood
Elevation. Risk Rating 2.0 incorporates past and future flood models into projecting a flood insurance rate
• FEMA’s Objective
• Risk Rating 2.0 will help customers better understand their flood risk and provide them with more accurate rates based on
their unique risk. This will include determining a customer’s flood risk by incorporating multiple, logical rating
characteristics–like different types of flood, the distance a building is from the coast or another flooding source, or the cost
to rebuild a home.
• Actual
• Massive rate increases for Tampa Bay homes. The rate increases are the most substantial for lower elevation homes, coastal
homes, high value homes
• Risk Rating 2.0 complies with existing statutory caps on premium increases at 18% to 25% per year
Prior to August 30, 2021 Florida Expectations
Where is Flood Insurance Purchased?
• National Flood Insurance Program (NFIP)
• Risk Rating 1.0
• About 90% of flood insurance is purchased from the NFIP
• The NFIP also has a Write Your Own (WYO) Program where private carriers represent the NFIP
• Wright Flood
• Allstate
• Assurant
• Risk Rating 2.0
• Approximately 10% of Florida flood insurance will be purchased from the NFIP from a long term outlook standpoint
• Private Flood Insurance
• Private flood became a player in 2013 with the Biggert-Waters Act (rate increases from $2,000 to
$20,000
• Typical private flood carriers
• TypTap
• Lloyds of London
• Endorsement to the homeowners policy
Rate Example 1
63
rd
St and 30
th
Ave N, 33710
• Coverage
• Total Dwelling Value - $350,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $3,663
• Coverage
• Total Dwelling Value - $350,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $3,663
• NFIP Risk Rating 2.0
• $1,755
• Private Flood
• $446.26
Rate Example 2
• E Vina Del Mar Blvd, St Pete Beach 33706
• Coverage
• Total Dwelling Value - $1,500,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $636
• Coverage
• Total Dwelling Value - $1,500,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $636
• NFIP Risk Rating 2.0
• $11,628
• Private Flood
• $1,942.50
Rate Example 3
• FeatherSound, Clearwater, 33762
• Coverage
• Total Dwelling Value - $450,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $1,658
• Coverage
• Total Dwelling Value - $450,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $1,658
• NFIP Risk Rating 2.0
• $3,450
• Private Flood
• $4,465.65
Rate Example 4
• Symphony Isles, Apollo Beach, 33572
• Coverage
• Total Dwelling Value - $995,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $824
• Coverage
• Total Dwelling Value - $995,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $824
• NFIP Risk Rating 2.0
• $10,578
• Private Flood
• $2,508.45
Rate Example 6
• Ballast Point, Tampa, 33611
• Coverage
• Total Dwelling Value - $300,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $3,663
• Coverage
• Total Dwelling Value - $300,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $3,663
• NFIP Risk Rating 2.0
• $5,737
• Private Flood
• $3,588
District 1 Example
• Coverage
• Total Dwelling Value - $550,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $552
• Coverage
• Total Dwelling Value - $550,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $552
• NFIP Risk Rating 2.0
• $8,327
• Private Flood
• $1,950
District 2 Example
• Coverage
• Total Dwelling Value - $400,000
• Dwelling - $400,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $25,513
• Coverage
• Total Dwelling Value - $400,000
• Dwelling - $400,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $25,513
• NFIP Risk Rating 2.0
• $9,879
• Private Flood
• $6,791.40
District 3 Example
• Coverage
• Total Dwelling Value - $600,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $3,663.00
• Coverage
• Total Dwelling Value - $600,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $3,663
• NFIP Risk Rating 2.0
• $11,455
• Private Flood
• $4,470.90
District 4 Example
• Coverage
• Total Dwelling Value - $2,000,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $445
• Coverage
• Total Dwelling Value - $2,000,000
• Dwelling - $250,000
• Contents - $100,000
• Deductible - $5,000
• NFIP Risk Rating 1.0
• $445
• NFIP Risk Rating 2.0
• $11,628
• Private Flood
• $1,950
