MIAMI (CBSMiami) – Just as the National Flood Insurance Program is in the middle of a major campaign to get homeowners to join the program and protect their homes two developments are combining that could cause significant rate hikes and end a traditional break Florida insurance agents have offered potential clients.

Congress has until the end of the month to either extend the current Flood Insurance program or pass a revamped law that most likely will include rate increases. If lawmakers fail to do either, the program will grind to a halt and with it the writing of mortgages in flood danger areas like South Florida. where more than a quarter million policies are in force.

The US House has already passed a bill that raises premiums in some areas and cuts them in others, part of an effort to set premiums based on risk. The Senate is considering its own plan, but both plans will likely include new flood maps and new rates.

The National Flood Insurance Program is $18 billion in debt.

Whatever the feds do will have a major impact in Florida, and specifically South Florida, which has a large part of the state’s 2.1 million flood insurance polices. Almost 40 percent of the nation’s 5.6 million flood insurance policies are written in the Sunshine State.

On top of any possible rate increase, new customers may see a net increase in flood insurance costs because FEMA, the Federal Emergency Management Agency that runs the program, is demanding Florida insurance agents stop offering rebates of up to 15 percent to people who buy a new flood insurance policy.

The rebates come out of the commission an agent is paid to sell the policy, effectively cutting their profit so they can attract the business.

The policy is legal in Florida but against the law in most of the US, and FEMA said it believes people drop policies, then buy new ones to take advantage of that rebate, a practice called churning.

While insurance agents have been told to end the practice or risk losing the right to sell the insurance, some Florida agents are putting together a petition drive in an effort to get FEMA to reconsider.

The net result is that South Florida homeowners are likely to pay more, but it’s too early to know how much. Shopping around is not an option, because homeowners policies don’t offer flood insurance. Only the feds insure against flood damage.

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