The Key West Mystique

Key West Island News


Key West Island News connects Key West residents and friends of the island, fosters our One Human Family culture and advances understanding of shared goals for our island community

Flood insurance: Can we afford to live on the sand?

By Linda Grist Cunningham, editor and proprietor

Linda Grist Cunningham is editor and proprietor of Key West Island News and KeyWestWatch Media LLC. She and her husband, a park ranger at Fort Zach, live in Key West with their Cat 5s.


Remember that childhood story, The Three Little Pigs, where the wolf huffed and puffed and blew away the houses built of sand and sticks?

It’s something of an allegory for those of us who’ve chosen to live and work on river banks, lake shores and seaside dunes. Ah, waterfront property. Two words that evoke daydreams and pump thousands of market value dollars into even a modest bungalow on the Jersey Shore, in the Keys, beside Lake Michigan or along the mighty Mississippi.

And, then along comes the big bad wolf. Think Hurricane Sandy or Katrina. Think Storm Surge Wilma in Key West in 2005. Pity old Henry Flagler whose railroad connected Key West to the mainland and fell apart forever in the 1935 hurricane.

Ought we allow any development in flood plains? Probably not. There’s not a lick of sense in building multistory high rises on a sand dune. Miami, Chicago and New York City come to mind, not to mention the bungalows of New Orleans and Key West. Even less sense in rebuilding it. But that dog done left the yard.

We are water-facing people and we pave over, build on top of and next to watersheds and flood plains. We plant a house and follow up with businesses to support it and entertain us. We look askance at the sprawl along the Outer Banks of North Carolina — and promptly rent a vacation home on the beach in September.

No one has the stomach for restoring the U.S. flood plains to pre-1492. It’s just not going to happen, so we best be exploring alternatives. For now, unfortunately, what we’re stuck with is federally subsidized flood insurance — and it’s broke.

In 2012, the U.S. Congress approved the Biggert-Waters Flood Insurance Reform Act, which was supposed to raise flood insurance rates high enough to replenish the National Flood Insurance Program. The federal government wanted out of the business of subsidizing flood insurance.

Then came the big “oops.” Oops, we had no idea how economically devastating those increases would be on home owners and businesses. So, after months of political wrangling, on March 21, President Barack Obama signed a relief bill that mitigates some of the rate increases built into Biggert-Waters.

Home owners who actually live in their flood plain homes will see their rates increase, but not at the staggering levels called for in Biggert-Waters. Instead of going up 25 percent per year for(almost)ever, they’ll increase a maximum of 18 percent annually.

Second home owners, businesses, houses of worship, not-for-profits and others, such as condos and rentals, remain on the 25-percent so-called glide path to full value premiums.

No matter how one computes it, if one has a mortgage on a property in a flood plain that requires insurance, the bills are headed up. Flood insurance premiums can climb from a few hundred to tens of thousands annually.

As they should, say the critics of federally subsidized insurance and many environmentalists. Build one’s house or business on sand? Next to water that big winds whip into monsters? Well, why should the rest of us pay for your folly?

(See previous paragraphs about the dog that left the yard for the answer).

Subsidized federal insurance is part of the solution. With last week’s relief bill, there are opportunities to find solutions that can protect the economic engines that line our shores, protect the home owner’s investment, while requiring equitable “skin in the game,” and protect the fragile environment.

But, if Obamacare dissonance becomes the script for national flood policies, we’re in for some very unpleasant political theater.

Linda Grist Cunningham is editor and proprietor of KeyWestWatch Media, a project management company. She lives in Key West (in house only a few feet about sea level and she pays for flood insurance even though it’s not required.)




1 Comment

  1. Robert Drummer

    There are 2 companies in Florida providing alternatives to the National Flood Insurance Program; Homeowner’s Choice Insurance in Tampa and The Flood Insurance Agency in Gainesville. Premiums are similar to pre-Biggert-Waters levels.

    The Florida legislature is working to make it easier for others to join in. Florida provides over 35% of the premiums but only a small fraction (1%-ish in 2012) of the claims.

    Time for Florida to jump out of the NFIP and let each state carry their own weight.

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