Lee County, Fla., Faces Flood Insurance Premium Hikes Amidst NFIP Discount Loss

NFIP Discounts at Risk in Lee County

Property owners in Lee County, Florida, are bracing for a significant increase in their flood insurance premiums as the Federal Emergency Management Agency (FEMA) announced the potential loss of discounts under the National Flood Insurance Program (NFIP) Community Rating System (CRS). CRS is a voluntary program that rewards communities for implementing floodplain management practices that exceed NFIP minimum requirements. Over 1,500 communities participate nationwide, but Lee County's towns, including Cape Coral, Bonita Springs, Estero, Fort Myers Beach, and unincorporated Lee County, are at risk of losing their discounts starting October 1.

FEMA's Decision and Its Implications

FEMA's decision to revoke the discounts is due to issues such as unpermitted work, lack of documentation, and failure to monitor activity in special flood hazard areas. These problems were highlighted after Hurricane Ian in 2022, when federal teams visited the affected areas. The discounts, which currently range up to 25 percent, will increase annual premiums by approximately $300 for the 115,000 homeowners affected. This move comes amidst rising NFIP rates, partly due to the Risk Rating 2.0 reforms, which more closely align premium rates with property-specific risks.

Private Flood Insurance Market Growth

In response to rising NFIP rates, the private flood insurance market has seen significant growth. Florida, in particular, has the most robust private flood insurance market in the United States, with nearly a third of flood policies now written by private carriers. This trend mirrors a national increase, with the total flood market growing 24 percent between 2016 and 2022. For consumers, this means more options and potentially better pricing and coverage than what NFIP offers. It's advisable for property owners to shop around and obtain multiple quotes to find the best coverage for their needs.