FEMA Halt to Flood Insurance Rebates Means Millions in Annual Savings Will Vanish from Florida Communities, Says Advocacy Group

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In Sun-Sentinel Guest Editorial, Community Advocacy Network Director Donna DiMaggio Berger Calls on Floridians to Petition FEMA to Reverse Detrimental Decision

FEMA Petition - http://bit.ly/HMaZTs

This FEMA decision will take millions of dollars in flood-insurance savings out of the coffers of struggling, cash-strapped Florida communities ... Most impacted will be property owners living in tens of thousands of Florida community associations.

A recent decision by the Federal Emergency Management Agency (FEMA) to disallow insurance agents rebating a portion of their own commission from flood insurance policies will take millions of dollars in savings out of the coffers of struggling, cash-strapped Florida communities, unless Floridians act now to successfully urge FEMA to rescind its decision and reinstate the practice.

In a guest editorial in today’s South Florida Sun-Sentinel (http://sunsent.nl/Lk89ZV), leading Florida community association attorney Donna DiMaggio Berger writes that the unprecedented move by FEMA will end a program implemented in 2006 to allow agents writing national flood insurance policies to rebate up to 15 percent of their commission to their customers.

Those who will be most impacted by FEMA's dictate, she says “will be property owners living in tens of thousands of Florida condominium and homeowner associations located in low-lying areas, where the vast majority of Floridians reside today.”

Berger, who is Executive Director of Florida’s Community Advocacy Network (http://www.CANFL.com) and a Founding Partner of the statewide community association law firm of Katzman Garfinkel & Berger (http://www.KGBLawFirm.com), urges Floridians to sign petitions being circulated that call on FEMA to reinstate the rebating practice, which has been allowed for more than 15 years in Florida under Statute 626.572.

The online petition from her own Community Advocacy Network urging FEMA to reconsider its detrimental decision to discontinue the rebating of agents’ commissions is available online at: http://bit.ly/HMaZTs.

“FEMA itself, in 2006 at the height of the good economic times now behind us, began permitting so-called Write Your Own (WYO) flood insurance carriers in Florida to allow agents to rebate a portion of their commissions to encourage extending NFIP flood coverage to more homeowners,” Berger writes in the Sun-Sentinel, noting that “now, in the dark depths of the economic downturn in our state, FEMA says it wants to reverse course” alleging complaints about the rebating practice from some in the insurance industry.

“Obviously, those complaints cannot be coming from agents who offer the rebates nor are they coming from the thousands of Floridians who have saved significant amounts on their flood policies over the last six years,” Berger says. “They must be coming from those agents who are losing out in the more competitive insurance market that rebating stimulates by leveling the playing field for smaller agents (who) stay competitive against larger players by offering rebates of up to 15 percent of their own commission fees to their customers.”

Berger further notes that the longstanding practice of rebating bears no direct relationship to the cost of flood insurance to consumers, because flood insurance policy premiums already are capped and uniform, while the rebates are deducted solely and exclusively from an insurance agent’s own commission.

But millions of consumers living in Florida’s estimated 60,000 shared ownership communities, such as condominiums and HOAs, do stand to lose significantly because of the FEMA decision, Berger notes. The vast majority of those associations are located in the same flood vulnerable areas where most of Florida’s 2.1 million flood insurance policies are written each year – along the coast, where 8 in every 10 Floridians now live, and in the counties south Lake Okeechobee that are now home to 8.1 million Floridians, more than 43 percent of the state’s total population.

“These communities have already been hit hard by steep increases in insurance rates, while simultaneously seeing their assessment income from homeowners dwindle as a result of the residential real-estate downturn and the mortgage foreclosure crisis,” Berger writes. They will be particularly hard hit by the FEMA ban on rebates, set to take effect October 1st, because “many of these communities have come to rely upon significant savings in their insurance premiums that these rebates represent for them.”

In addition, she says the FEMA decision may have a further negative “trickle down” impact on many local small businesses, as communities around the state find their ability to finance landscaping, security, cleaning, plumbing, electrical and other vital services further constrained by the loss of the insurance rebate savings.

Floridians concerned over FEMA’s detrimental decision to discontinue the rebating of agents’ commissions are urged to petition the federal agency immediately at http://bit.ly/HMaZTs.Only by a concerted, immediate action to urge FEMA to reconsider this decision will community associations statewide be able to retain their 2012 annual flood insurance policy rebate this year.

Founded in 2007 by the Florida community association law firm of Katzman Garfinkel & Berger, the Community Advocacy Network represents more than a million homeowners across the state and is Florida’s only advocacy group speaking exclusively for association homeowners and their boards.

For more information about the benefits of CAN membership and the organization's activities around the State, please contact Julie Fishman at jfishman(at)canfl(dot)com or (954) 486-7774.

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About the Community Advocacy Network (CAN)

The Community Advocacy Network (CAN) is Florida’s leading voice for the interests of more than 60,000 community associations statewide, advocating for progressive community association legislation and leading the fight against over-regulation of private residential communities by state and local government.

As a not-for-profit, non-partisan organization, CAN’s year-round educational program provides the latest information to Florida community association members on issues critical to the maintenance of their community lifestyles and property values. Each year since its inception in 2007, CAN has spearheaded important State legislative reforms designed to protect and enhance Florida community association living and foster the financial stability and operational integrity of common-interest ownership communities statewide.

Established by the law firm of Katzman Garfinkel & Berger, the Community Advocacy Network operates with the guidance of a volunteer Advisory Council of community association managers, Board members and attorneys from throughout the state. Organizational membership is open to all Florida condominiums, co-operatives, homeowner associations, timeshares and mobile home communities. For more information on the benefits of CAN membership and the organization’s activities throughout Florida, visit http://www.CANFL.com.

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