As thousands brace for a spike in their flood insurance premiums, federal lawmakers go to bat

In late March, the Federal Emergency Management Agency alerted Lee County that people living in several jurisdictions should expect to lose the 25 percent discount they are currently allotted through the National Flood Insurance Program (NFIP).

Congressmen Byron Donalds and Greg Steube joined Senators Rick Scott and Marco Rubio in responding to FEMA’s actions. They sent a letter to the FEMA Administrator, Deanne Criswell, urging the agency to reverse its decision to eliminate the discount.

The retrograde of the NFIP premium discount is yet another unforeseen
challenge for Lee County residents, who continue their fight to recover
from Hurricane Ian. In the wake of disaster recovery and skyrocketing
inflation, Lee County residents now face even higher living costs as a
result of this decision. We urge you to immediately conduct a thorough
review of this decision, honor the original discounts and meet
with local leaders to remedy any issues and keep NFIP discounts in place. Byron Donalds (R-FL) Member of Congress
Greg Steube (R-FL) Member of Congress
Rick Scott (R-FL) United States Senator
Marco Rubio (R-FL) United States Senator

About 699,000 residents live in areas impacted by the cancelled discount – Bonita Springs, Cape Coral, Village of Estero, Town of Fort Myers Beach, and unincorporated Lee County, including Captiva.

According to the county, 51,103 NFIP policies are enforced in unincorporated Lee County.

At Tuesday’s Commission meeting, local leaders called on FEMA to pause the decision, which is now expected to take effect October 1, 2024. They also called on federal lawmakers for assistance.

FEMA’s recent decision to lower discounts and raise premiums for some NFIP
policyholders in Lee County is liable to create yet another unacceptable
rise in costs for Southwest Florida families and businesses still recovering from
Hurricane Ian that is catastrophic for their financial stability. It is critical to the
livelihoods of Florida families and businesses that FEMA does everything needed
to work with local leaders to ensure further cost increases do not take effect. Byron Donalds (R-FL) Member of Congress
Greg Steube (R-FL) Member of Congress
Rick Scott (R-FL) United States Senator
Marco Rubio (R-FL) United States Senator

According to information provided by FEMA, “the large amount of unpermitted work, lack of documentation, and failure to properly monitor activity in special flood hazard areas, including substantial damage compliance,” are at issue.

“Ian was the third costliest hurricane to hit the United States, and many of our residents are still reeling financially from its impacts,” said Lee Board of County Commission Chairman Mike Greenwell.

The County provided WINK News with copies of ongoing email exchanges with FEMA post-Ian. One letter from FEMA to Commissioner Cecil Pendergrass pointed to the 50% Rule. It is a “regulation of the National Flood Insurance Program that prohibits improvements to a structure exceeding 50% of its market value unless the entire structure is brought into full compliance with current flood regulations.”

“We are committed to helping these communities take appropriate remediation actions to participate in the Community Rating System again and work towards future policy discounts,” said Lea Crager, FEMA spokesperson.

FEMA explained the Community Rating System as a “voluntary incentive program that recognizes and encourages community floodplain management practices that exceed the minimum requirements of the National Flood Insurance Program. In CRS communities, flood insurance premium rates are discounted to reflect the reduced flood risk resulting from the community’s efforts that address the three goals of the program:

• Reduce and avoid flood damage to insurable property
• Strengthen and support the insurance aspects of the National Flood Insurance Program
• Foster comprehensive floodplain management

The CRS uses a rating system to determine discounts ranging from Class 10 (low) to Class 1 (high). 

Charlotte County and Collier County are CRS Class 5, meaning property owners receive a 25% discount on their insurance premiums.

Flood Insurance Overview from Florida CFO:

Most flood insurance policies currently providing coverage in Florida are underwritten by the NFIP. The NFIP is managed by the Federal Insurance & Mitigation Administration which is a part of FEMA. These policies may be issued directly by the NFIP or by various property and casualty insurance companies through a NFIP program called “Write Your Own.” Through the WYO program, the insurance company issues and services the policy, however the NFIP is responsible for paying any claims arising from the policy. A policy underwritten by the NFIP will always have a NFIP Policy Number listed on the declarations page. Additional information about purchasing or renewing a NFIP Flood Insurance policy may be obtained at FloodSmart.gov. Additional information regarding the NFIP’s newly implemented rating methodology known as Risk Rating 2.0, is available at FEMA.gov/flood-insurance/risk-rating.