Article Courtesy of The Tampa Bay Times

By John Romano

Published December 14, 2013

Just about 20 years ago, the state Legislature took a stand against profiteers.

Disturbed by reports of businesses jacking up prices to prey on victims of Hurricane Andrew, the Legislature passed a law forbidding price gouging in the wake of storms.

The word used in Florida Statutes is "unconscionable.''

Unfortunately, the law only applies to post-storm and not pre-storm gouging. And it excludes price increases by government agencies.

In other words, the Federal Emergency Management Agency can be unconscionable from here to San Diego and every town between. Through the National Flood Insurance Program, FEMA can set premiums without justification or hope of redress.

And make no mistake, the prices FEMA has been quoting around here have more in common with price gouging than the reality of flood risk.

A story by Anna M. Phillips in the Tampa Bay Times on Saturday outlined a Seminole home that saw flood insurance premiums jump 900 percent a few months after being sold.

The new insurance cost? Nearly $44,000 annually for a policy that will reimburse no more than $250,000 for the house itself.

Think about that. The only way that policy is worth the premiums is if the house is destroyed every five years. And only by floods.

I know loan sharks with more reasonable rates.

Even worse is FEMA officials and lawyers have been trying to justify absurdities such as this in a Mississippi courtroom the past few weeks.

FEMA administrator Craig Fugate seems to want credit for being sympathetic, but says his hands were tied once Congress passed the Biggert-Waters flood insurance reform act in 2012. And now FEMA is aggressively seeking dismissal of a lawsuit filed by Mississippi's insurance commissioner asking to delay implementing the law.

The lawsuit argues that Congress instructed FEMA to conduct an affordability study on rate changes to be done before the law kicked in.

Big surprise — the study still hasn't been completed.

Fugate says it could not be completed that quickly, not to mention that a study of that size exceeds the funds set aside for it by Congress.

So damn the premiums, full speed ahead.

FEMA is apparently setting rates based on wishes and whims because they have nothing to do with historical context in Florida and specifically in Pinellas County.

A recent Times study revealed that St. Petersburg property owners have paid $8 in premiums for every $1 in claims the past 35 years.

So how does FEMA justify increases that are suddenly five times higher when St. Pete has been subsidizing the program for decades? 

And while hurricanes in New Orleans and New Jersey led to massive flooding problems in recent years, there is little evidence that Florida homes are at high risk. Florida hurricanes have led to far more wind damage, which is not covered by flood insurance. In the past 35 years, only one Florida hurricane has caused major flood damage.

And yet none of that matters to FEMA officials.

They have a law that makes them accountable to no one when it comes to rates. They have people held hostage by homes that are now difficult to resell and by mortgage companies demanding they carry flood insurance.

Apparently they have the blessing of the federal government to gouge you.

Seminole couple hit with $44,000 flood insurance premium

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