Florida SB 180 May Raise Flood Insurance Costs by Limiting Mitigation

Florida Senate Bill 180 aims to accelerate hurricane relief and recovery by streamlining rebuilding processes for homeowners damaged by natural disasters. The bill has passed both the Florida House and Senate and is awaiting Governor Ron DeSantis' signature. While designed to provide quicker restoration efforts, SB 180 includes provisions such as a two-year freeze on adopting stricter local building codes, which could delay improvements aimed at strengthening homes against extreme weather. The bill also lowers the threshold requiring destroyed homes to be demolished and rebuilt to 50 percent damage, potentially reducing mandatory elevating and other mitigation measures.

Florida homeowners face some of the highest home insurance premiums nationally, driven by frequent natural disasters and other market factors. Average home insurance in Florida is currently 24 percent above the national average. Flood insurance, a separate policy in Florida, adds significant costs averaging $865 annually under the National Flood Insurance Program (NFIP). Experts warn the bill may further increase flood insurance costs by discouraging mitigation efforts like home elevation, which in turn could impact insurance discounts offered under programs such as FEMA's Flood Mitigation Assistance and Florida's Elevate Florida.

A state study forecasts that approximately 44,000 homeowners could face higher flood insurance premiums due to SB 180, with an estimated statewide annual increase of $1.6 million in flood insurance costs. Twelve Florida communities could lose eligibility for current premium discounts as a result of the bill's restrictions on local resilience measures. Critics argue the legislation removes important local government tools to enhance community flood resilience and containment of future risk exposure.

Insurance academic Charles Nyce from Florida State University explains that SB 180 prohibits local 'lookback' periods that limit rebuilding to standards above current flood zone codes. While some communities might find alternative ways to maintain discounts, eliminating these lookback periods could increase future flood losses. Proponents emphasize that the bill aims to reduce homeowner displacement and restore damaged properties without added burdens.

Advocates for local floodplain management express concern that the bill undermines community-level disaster preparedness by restricting updates to land development codes and other resilience policies. They highlight that limiting these tools could exacerbate the cycle of flood damage and repair, impacting long-term insurance stability.

With hurricane season approaching, the timing of SB 180's potential implementation raises questions about its impact on Florida's insurance market stability and building safety standards. Insurers often factor mitigation investments into premium pricing, and reduced mitigation incentives could create additional market volatility.

This bill illustrates the tension between accelerating disaster recovery and maintaining or enhancing resilience standards that influence insurance risk and costs. Ongoing monitoring of the legislation's effects on premiums, coverage availability, and building practices will be critical for stakeholders across the property insurance sector in Florida.