On top of homeowner premiums, policyholders could face a new tab coming soon: Flood insurance

The state insurer of last resort would require flood insurance for policyholders beginning in 2024

By: - December 14, 2022 5:00 am

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When State Rep. Dianne Hart heard details about a requirement for flood insurance — part of legislation in the special session on property insurance reforms — she saw right away what would happen:

“If I gotta buy flood insurance, that means I have to add a premium to my already exploded premium,” said Hart, who represents part of Hillsborough County and is chair of the Florida Legislative Black Caucus.

“Some people say, well it’s only $400 a year,” Hart said, “but every single dime to low minority communities is a dollar. It is not a dime. Because people need help.”

Public officials from both sides of the aisle said Tuesday that the intention of this week’s special session in the Capitol was to bring “real relief and the relief on the part of homeowners and not just insurance companies,” said Sen. Darryl Rouson, who represents parts of Hillsborough and Pinellas counties. “We’re bailing out reinsurance program surplus lines and not giving real relief to the people.”

Then comes a new expense for many homeowners — the flood insurance Hart was talking about.

A bill passed by the Senate Tuesday will slowly raise the rates of more than 1.1 million policy holders of Citizens Property Insurance Corp., the state-run property insurance carrier of last resort.

But a provision in HB 1A requires that most Citizens policy holders must purchase and maintain flood insurance coverage over the coming years that is at least equivalent to the coverage provided by the National Flood Insurance Program (NFIP).

Only 18% of all Florida homeowners carry a flood insurance program, either through the NFIP or a private flood insurer, according to the Insurance Information Institute.

The legislation says that Citizens “may deny coverage” to a policyholder or applicant who refuses to purchase and maintain such coverage. The legislation must be approved by the House and Senate.

The measure does allow existing Citizen customers whose policy doesn’t provide wind coverage to not be required to purchase flood coverage. But that’s fewer than 30,000 customers, according to Citizens spokesman Michael Peltier.

The speed of which a Citizens customer must get that new flood insurance package depends on the value of their home.

For customers whose property is valued higher than $600,000, they must get flood insurance by Jan. 1, 2024. For those whose home values are above $500,000 can wait until 2025; those over $400,000 have until 2026, and every other Citizens customer must get flood insurance by January 1, 2027.

The bill would force Citizens’ policyholders to switch to a private insurance carrier if that carrier’s premiums are no more than 20% higher than Citizens’ when renewing.

“There’s so many parts of the bill that allow Citizens’ to not only force you off, even if it’s 20% more expensive for you, but there’s also potentially going to just be worse coverage options,” Orlando-based Democratic state Rep. Anna Eskamani lamented. “At the end of the day, doing that when the market is not stable and the options for something low-cost are right now not available is really anti-consumer and just a bad policy decision for families who need support the most.”

Kevin Swanson, a property insurance salesman in Hillsborough County, says typically a homeowner only buys flood insurance if they live in a flood zone where the lender requires it, adding that he offers it to every client because, as Hurricane Ian proved, the whole state is vulnerable to flooding. He says the inclusion of requiring flood insurance for Citizens’ customers addresses litigation concerns.

“Was the damage caused by wind driving rain (homeowner insurance) or raising water (flood insurance)?” he told the Phoenix in a text message. “By requiring flood, this will reduce the dispute and there will be coverage for both perils.”

The legislation also calls for the overwhelming number of Florida homeowners who don’t have flood insurance through their private insurance provider to receive a statement (in 18-point type) at every initial insurance and renewal notice that they may need to consider purchasing flood insurance.


Industry officials say that the cost for those living away from coastal areas is usually around $500 or less, for flood insurance, but more expensive on the coast.

But that’s only part of the equation.

How much are Floridians paying overall in property insurance premiums? It’s pretty complicated.

Most news organizations cite the numbers from the Insurance Information Institute, which released an analysis over the summer citing the average Floridian’s home insurance policy rate went up to $4,231 — nearly three times the U.S. annual average of $1,544.

The Insurance Information Institute says they calculated that figure based on their own research but aren’t comparing it to other states because of a several-year lag in data reported to the National Association of Insurance Commissioners, according to spokesman Mark Friedlander.

Other rating agencies differ somewhat on how much Florida’s annual insurance premiums are compared to the rest of the nation.

Insurance.com lists the state’s annual premium rate for those with a policy with a 2% hurricane deductible of $4,218 a year, and $2,426 without the deductible.

“When that hurricane coverage is included, the average rate is much higher,” says Leslie Kasperowicz, managing editor for Insurance.com. “Leaving it off the policy brings rates down quite a bit and makes home insurance more affordable in coastal areas but is also a risky decision on the homeowner’s part. Florida is a big state, so the impact of hurricanes on rates doesn’t affect all parts of the state the same way. The problem with averages is that most people aren’t going to pay the average at all. Coastal area homes are always going to see higher rates, and some of those rates in Florida are astronomical.”

Bankrate.com lists the average annual premium in Florida for $250,000 in dwelling coverage at $1,648. That’s below nine other states: Nebraska ($2,849), Louisiana ($2,009), New Mexico ($1,939), North Dakota ($1,872), Colorado ($1,863), Minnesota ($1,880), Mississippi ($1,840) and Kentucky ($1,820).

Cate Deventer, an insurance expert with Bankrate.com, says that their organization works in partnership with Quadrant Information Services to collect property insurance data. She says that Florida’s average property insurance premium is about 19 percent higher than the national average, but stresses that “with so much turmoil in the Florida property market this year, it’s difficult to get a fix on average rates in the state.”

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Mitch Perry
Mitch Perry

Mitch Perry has covered politics and government in Florida for more than two decades. Most recently he is the former politics reporter for Bay News 9. He has also worked at Florida Politics, Creative Loafing and WMNF Radio in Tampa. He was also part of the original staff when the Florida Phoenix was created in 2018.