Insurance Experts: More Information Needed On Flood Insurance

Aug 25, 2015

Credit Stacy Young

When it comes to flood insurance in Florida most people agree on one thing – there’s not enough information.

Just ask Lori Medders, director of the catastrophic storm risk management center at Florida State University.

“It’s difficult to estimate where and how severe floods are going to be,” Medders says.

Medders isn't the only one with that opinion. Jay Baker runs the consulting firm Haz Group. He is a recent retiree from FSU where he studied how people react to severe weather events. 

“For hurricanes people are given lots and lots of information that tells them about their vulnerability for hurricanes,” Baker says. 

In Florida, Baker says coastal residents are given maps that show how likely their property is to face flooding from hurricanes and how likely it is that they’ll need to evacuate. But he says for non-hurricane related floods, or river floods, it’s a different story. 

"For river flooding, they don't have nearly as much information. There are probably some exceptions, but in general the only information they have is these maps that the national government prepares for the National Flood Insurance Program," Baker says.

And the state’s insurance commissioner, Kevin McCarty says he’d like more information about just how the Federal Government uses those maps to decide how Floridians should be charged for flood policies. 

“When rates are being developed I think it’s important that the public and the states have access to that information given the critical impact it will have in individual home owners, businesses and the larger economy,” McCarty says.

McCarty says the Federal Flood Insurance Program is really the only place that collects flood data. And the program is the main provider of flood insurance coverage in Florida. But Sen. Jeff Brandes (R-St. Petersburg) says as prices climb he wonders if Florida is being treated fairly. He’s asked McCarty and the Florida Office of Insurance Regulation to look into the issue. And McCarty says it’s true, Florida is carrying a heavy load under the program. 

"I mean we represent 37 percent of the policies in the program, and if you look at it over the yeas, for every dollar that we've put in, we've gotten a quarter back," McCarty says.

But McCarty says one way to address that is by opening the door wider for private insurance companies to write flood policies. To do that, he says greater transparency is needed and he’s pushing for sharing data and flood models. 

“I think giving that information into the private sector gives us the opportunity to ensure that there’s a broad spectrum of interested parties who are looking at this and using that information to develop models and with that I think you have a better opportunity to develop competition as well as a better made model," McCarty says.

Last regular legislative session Brandes pushed legislation that has made room for private insurers to start offering some flood protection in Florida. He says he’ll be taking a look at it again before the coming session to see whether any clean up or expansion is needed. Meanwhile, McCarty is supporting a piece of Federal legislation offered by Florida Congressman Dennis Ross, which he says would give states more flexibility to decide which companies are suited for offering flood insurance to their citizens.