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Less than half of Florida homeowners have flood insurance

September 10, 2017 at 5:20 PM EDT
Across Florida’s coastal counties, where Hurricane Irma bore down on Sunday, only 42 percent of homeowners have flood insurance, according to the Federal Emergency Management Agency. One reason for the gap is the high cost of government's national flood insurance program, which is set to expire this month. Suzanne Barlyn, who has reported on the issue for Reuters, joins Hari Sreenivasan.

HARI SREENIVASAN, PBS NEWSHOUR WEEKEND ANCHOR: In Houston and along the Texas coast, where Hurricane Harvey struck last month, only 20 percent of residents had current flood insurance policies. And once Hurricane Irma passes through Florida, there will be renewed conversations about who pays to rebuild.

As Reuters reported this week, there’s a small private insurance market there that may offer an example of what’s to come.

Suzanne Barlyn of Reuters is the reporter on that story and she joins me now.

So, let’s talk a little bit about how many of the people — when we see these storm surge maps, we see the flooding that Florida is about to expect, how many of the people in Florida are ready for this from an insurance perspective?

SUZANNE BARLYN, REPORTER, REUTERS: Florida has the largest percentage of NFIP policies in the entire NFIP system.

SREENIVASAN: That’s the National Flood Insurance Program, yes.

BARLYN: Yes, there are 1.7 million NFIP policies in Florida. It’s about 35 percent of the entire NFIP system. There are however a small number of policies now that are cropping up as part of a private flood insurance system that insures and regulators inside the state would like to see increase.

SREENIVASAN: Is there a need here? Is there a gap between what the National Flood Insurance Program will cover and people are kind of still at risk but can’t qualify for this?

BARLYN: Flood insurance is a huge debate in Congress right now. It’s a huge debate among state regulators, especially in the run up to September 30th, which was the date that the NFIP authorization was to expire. On Friday, President Trump extended that for another three months. And one of the options on the table is to allow more private insurance companies to write flood insurance. So, that the NFIP would not be saddled with huge debts such as those that came about n the wake of Hurricane Katrina and Hurricane Sandy.

SREENIVASAN: So, is there a concern that the flood insurance market could look a little like the health insurance market? I mean, is this the tension between whether or not there’s a mandate that exist and how private insurers can compete with the NFIP?

BARLYN: It is a concern. One of the issues that we’re seeing right now with the flood insurance market is so many homeowners are required to have NFIP coverage as a condition of their mortgage. The concern that critics of private flood insurance have is allowing too many private insurers into the area and loosening those restrictions and allowing private flood insurers to meet the requirements for obtaining mortgages, would lead the NFIP with riskier properties and premiums that the NFIP subsidizes, while the private insurers pick off the better risks for themselves.

SREENIVASAN: One of the things that we see after these national disasters is a kind of a national conversation saying, should we be backing this coastal beautiful house but you’re going to rebuild it at kind of our expense. Maybe you shouldn’t have built there in the first place.

BARLYN: It’s a debate that has brought together the most opposite — polar opposites that you can imagine in Washington. All advocating to reform the system but each of those organizations wants a little piece of something different.

SREENIVASAN: All right. Suzanne Barlyn of “Reuters”, thanks so much for joining us.

BARLYN: Thank you very much for having me. It was a pleasure.