Category Archives: FEMA and Flood Insurance

Private Insurance vs. FEMA

JULY 2014:  Flood insurance is a hot topic at the moment, the product is in flux. When the  Biggert-Waters Act was signed into law  in 2012, it was met with criticism and concern. This law set to remedy the long standing subsidized flood insurance rates that had subsequently bankrupted FEMA to the tune of 20 BILLION dollars.

PRIVATE INSURANCE VS. FEMA:  Home owners cried foul and pleaded for mercy as their rates were about to spiral out of control. Stepping in to combat the rate hikes was the introduction of private insurance, first in Florida and then spanning out across the country to include 15 states (as of this time).

Private insurance is written by Lloyd’s of London. Although they offer an alternative, with very competitive rates, my concern would be what happens if a catastrophic storm hits, àla Super Storm Sandy? If a private insurance company goes bankrupt – you could be out of luck in terms of receiving reimbursements. If FEMA backed insurance accumulates too many losses, they dig into the money bags of the USA government. Whose likely to run out of money first?

The entire goal of flood insurance, any insurance, is to make it self-sustaining. For that to happen, the rates must reflect the true risk involved.

PRESIDENT OBAMA SIGNS INTO LAW A FLOOD INSURANCE RELEIF ACT: In March of 2014, after much outcry from the constituents of flood weary states, the government backed down from it’s initial aggressive stance on curbing subsidized flood insurance rates. Essentially this law caps flood insurance premium rate hikes and passes on subsided rates to people buying homes in flood zones.

Flood insurance rates still need to be adjusted to better reflect the true risk of the home in a flood zone. Without it, people will continue to build, buy and live in a flood risk area, exposing the taxpayer to a significant burden. With the ever increasing rise in ocean levels, this is a real concern – for everybody. 

BEST SOLUTION  that I’m a big fan of: house elevation for flood mitigation. Your house is protected, your insurance rates drop dramatically, and you move from being a part of the problem to a part of the solution. Without a doubt, that is much easier said then done. Researchers, economists and lawmakers alike all favor this idea. The problem is implementing this expensive notion on a grand scale.

Just starting to rain ...

Just starting to rain …

A few hours later ... House across the street is deluged with flood water.

A few hours later …
House across the street is deluged with flood water.

If the above house were elevated, the only thing the home owner would need to do is move their car.

 

 

 

Insurance Rates Drop Dramatically, But Not Without a Fight

TIMELINE OF INSURANCE RATE ADJUSTMENT:  June 2013: we officially started the construction phase of our house project. (The planning phase began July 2012)

December 2013:  We moved back into our house with the majority of our project complete.

February 2014: All paperwork and certificates related to our building project were closed out. Project officially declared complete. (Still lacking minor details such as exterior painting and any landscaping, but too cold to address those issues now).

FloodSavvy.com IMG_4605 IMG_4643

March 2014: Submitted request to FEMA (umbrella under which the National Flood Insurance Agency operates) to lower our insurance premiums based on our new and improved flood savvy house. They rejected this request citing we required one additional flood vent.

Had additional flood vent installed.

FEMA again rejected our request to lower our rates. This time it was because the wrong box had been checked on our elevation certificate (final survey) sighting the source of our base flood elevation level.

In other words, they needed to confirm that we didn’t  just make up some numbers to make it sound good.

Skip this section if your eyes start to roll back in your head or you suddenly feel like you need to  nap. The source of the base flood elevation (BFE) MUST come from FIS or FIRM (Flood Insurance Rate Map) for your specific property.

Returned to my surveyor, spoke with the Flood Plan Manager for my city and resubmitted the forms to FEMA.  They requested yet another form, a flood application form, be completed. I thought this was odd as we’ve had flood insurance for over 10 years. FEMA insisted it was the protocol. Fine.

April 2014: The next hurdle: FEMA/NFIP wanted the square footage of our garage, despite the fact that is attached to our house, they have pictures of it, and they have a survey marking it. I should clarify that these conversations were between NFIP and my insurance agent. After spending weeks sending my insurance agent down a rabbit hole, I recommend she educate herself on this product (flood insurance), take the bull by the horns, and tell them what’s what. They have all the information, we’ve crossed every i and dotted every t, you have more important things to do than run around chasing your tail all day.

Mission Accomplished: Our insurance agent called and told me our paperwork had finally been accepted and that our flood insurance rates were going to drop from several thousand dollars per year to several hundred.

The clouds parted,  beams of sunshine shone down and a collective sigh could be heard across the phone lines. Then my agent told me she had to go – she was getting ready to watch a webinar on flood insurance.

FloodSavvy

 

 

Insurance Costs Remain High post House Elevation

OUR HOUSE IS “SPECIAL”: We live in a flood zone that has been deemed “special” by FEMA, and not in a good way. It’s rated in the highest category of flood insurance, beat out only by those who have ocean front views. The guilty party in our instance is not the Atlantic Ocean, but a gentle brook whose size is disarmingly small. Yet, it provides, under the right circumstances, significant flooding around the entire perimeter of our house. For all kinds of obvious reasons, we no longer wanted to have the brook entering our house like an uninvited guest who crashes the party and trashes your house.

RAISE THE ROOF: or the whole house, as we did. That’s right. Ripped it from its foundation, jacked it up about 5 feet, built some new access stairs and endured a few months of costly construction. All in the name of decreasing our flood risk and ever-climbing flood insurance rates.

Our updated information was sent to FEMA complete with our required new flood elevation certificate. We weren’t looking for a gold star for our foreheads, just a decrease in our flood insurance rates.

FEMA’S RESPONSE: No rate change – same as  BEFORE the lift. Why? Two words – Flood Vents.

Flood Savvy.com

Interior view of flood vent

WHAT IS A FLOOD VENT? Simply put, a flood vent allows for a free flow of flood water in and out of a home’s foundation walls. They serve to equalize the pressure on both sides of the foundation walls, decreasing the chance of significant damage. (see earlier post on flood vents)

FloodSavvy.com

FEMA accepted flood vents

Not only do you need to have them, you need to have the right number of them based on the square footage of your house. The correct number of vents were on our plans, but our builder missed two of them. FEMA is a stickler that all criteria be met. Our house is out of harm’s way, but because we have seven instead of the required nine flood vents, they offered no reduction. A true all or none philosophy.  They have no competition, you can only get flood insurance through FEMA so they get to make all the rules. Once installed, we’ll resubmit our data to FEMA and hope for a better outcome.

FloodSavvy.com

Flood vents cut into the foundation near the ground

 

18 Inches of Rain Brings Pain to Boulder, Colorado

At long last the rain has let up and the storm has passed, yet many will feel the ramifications of the recent flooding in Boulder, Colorado for months to come. Numerous homes endured total destruction while others suffered comparatively minor damage with flooding restricted to their basement. Unfortunately for those without flood insurance, they will have to rebuild on their own. Flooding is about as appealing as a kick to the head.

Should those who were impacted by this freak of nature storm run out to purchase flood insurance? No. It takes 30 days for a new flood insurance policy to take effect. But what about moving forward, should those homes impacted by floodwater purchase flood insurance? YES. Depending on the flood risk for your home, the rates can be very inexpensive.

FLOOD INSURANCE: THE LEAST YOU NEED TO KNOW

1. It takes 30 days to take effect

2. Building Coverage (house and mechanicals) and Content Coverage (your stuff) MUST be purchased separately

3. Flood Insurance offers limited coverage for basements

1500 HOMES DESTROYED IN BOULDER FLOOD: “Some 1,500 homes have been destroyed and about 17,500 have been damaged, according to an initial estimate released by the Colorado Office of Emergency Management.” HUGE numbers of homes have been impacted.

120,000 HOMES DAMAGED: “According to FEMA’s National Flood Insurance Program, 4,550 Boulder County homeowners are covered by flood insurance. That figure is well above the national per-capita average, but U.S. Census data suggests it still leaves many of the roughly 120,000 county households soaked and damaged, with dim prospects for total financial recovery.” www.dailycamera.com/news/boulder-flood/ci_24083820/flood-damage-leaves-boulder-area-residents-scrambling

Flood-Insurance

Hang in there, Boulder!

The Lord has Spoken: Giving Away Millions of Dollars

WEEK 13:  Earlier this week I spoke with Rick Lord, Chief of Mitigation Programs & Agency Preservation Officer for the New York State Office of Emergency Management. I had contacted him in hopes of securing some of the $230 million dollars FEMA had given to the state of New York for flood mitigation. Lord is the head of the program in charge of distributing the money statewide.

MILLIONS OF DOLLARS: This huge pile of money was sanctioned by the federal government and, according to Lord, all 50 States received this same amount as part of a Hazard Mitigation Grant. To date 1,232 homes in New York have benefited. In large part the money is being used to assist homeowners with elevation projects and acquisitions to mitigate against flooding. Homes impacted by Hurricane Irene in 2011 and tropical storm Lee that same year are eligible as well as the infamous Super Storm Sandy.

PLEASE, SIR, MAY I HAVE SOME MORE: How does it work and may I have a piece of that government pie? Well, for starters, homeowners can not apply themselves. The application must come from the city or town government office in which the home is located (very inconvenient). By definition, your city or town must participate in all flood mitigation rules and regulations to qualify for this money and be willing to jump through the government red tape for you. Next, your county must have been declared a national disaster during one of the above mentioned flood events. Your flood insurance category must be deemed “severe repetitive loss” and the extent of the damage must have exceeded 50% of the value of the house. For homes in metro New York – good luck meeting that threshold. If you want/need to live within an hour of New York City, the cost is set at a premium. See link below for more stats:

http://www.city-data.com/county/Westchester_County-NY.html

If your home meets all of the above criteria, it may be eligible for up to $30,000 toward an elevation project. I’m not sure what the acquisition top dollar would be – but I’m willing to guess that Uncle Sam can not afford to buy out many homes in Westechester County.

YOU’LL GET NOTHING AND LIKE IT! Final nail in the coffin for my home – if work has already begun toward elevating  your house,  your home is automatically disqualified. Seriously. Not that we would have qualified anyway, but penalizing initiative seems to go against the grain of the American way.

Sophisticated flood maps difficult to decipher (Houston Chronicle)

NEW PRICING: This article demonstrates the untold confusion many homeowners are facing regarding the new FEMA flood maps and their ramifications. We are painfully aware of the new consequences. The options available are limited: lift your house above the base flood elevation level OR prepare to face expensive flood insurance premiums. As we have personally experienced flooding in recent years, it was already on our radar. Many others, whose homes have not flooded in years and have sort of forgot about flood insurance for the most part, are waking up to a brand new expensive day.

HARtbeat

By: Kiah Collier, Houston Chronicle

Earlier this summer, before Jack Boze lost a buyer for his Kemah home to a surprisingly high flood insurance quote, he got online to see whether the odds that his waterfront property would flood had increased.

Click here to continue reading this story.

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House Elevations and FEMA Maps

Along with the east coast states of New Jersey and New York, Connecticut communities are actively elevating their flood prone homes. Many of the properties procuring this flood prevention tactic sit right on the coast line of the Long Island Sound. Beautiful front row views of the water, right up until the weather goes haywire and the Sound ends up sloshing around in their living room. Yesterday, Bloomberg published an article articulating the need for home elevations in this area, along with the impact of the new FEMA maps

As stated in some of my earlier posts, FEMA has begun to aggressively remap floodplains in those areas that have been hit the hardest in recent years: homes impacted by Hurricane Katrina and Super Storm Sandy. FEMA has set it’s sights next on California, the Great Lakes and Florida. In a nutshell –  more and more homes will have to two difficult and expensive options to choose from: elevate their homes or face sky-high flood insurance premiums.

See the article below for more information as well as some interesting photos:

www.bloomberg.com/news/2013-08-19/greenwich-stilt-houses-foreshadow-impact-of-new-fema-maps.html

House Elevation for Flood Mitigation: Frequently Asked Questions

What all is involved in a house lift? Does flood insurance pay for it? What is an elevation certificate and why would I need one? To find out the answer to these and many more exciting questions related to this flood mitigation technique –  home elevation, check out my newly updated FAQ’s section.

Can You Still Have A Basement in a Floodplain?

WEEK 8: Most of the work occurring on our house elevation project this week are of the unseen nitty-gritty sort. The construction crew is preparing for the return of Payne, our lifting company, by completing the last few foundation projects: aligning the proper height all walls, erecting support beams under the crawl space in the rear of our house, fortifying the cinder blocks, and beginning to fill in the basement.

Can you still have a basement?: No, we will not have a basement in the traditional sense of the word. Historically, the basement evolved as a cool, dry, place to store food and provisions. Over time that idea expanded into habitable living space. As building codes developed, the placement of basement/foundation walls were formally established. In short, foundation walls have to be dug below your area’s frostline. In metro New York, the frost line is four feet deep. That means all the foundation walls have to be dug at least four feet below grade. It makes sense to dig a bit deeper, hollow out that space, and have a usable basement. Ever wonder why so many houses in the northern states have basements vs. those in the south? That’s why. The frost line in many southern states is mere inches. No need to dig as deep and incur an unnecessary expense.

Just because your foundation walls are four feet (or more in colder climates) deep, does not mean you have to hollow out the space and create a ‘basement.’ In fact, in a floodplain, you can not do this. What happens to our current basement? It gets backfilled with gravel and other materials then covered with cement, eliminating any below grade space. This new area is now referred to as the “lowest floor.” By floodplain management regulations, the lowest floor below base flood elevations may only be used for storage, parking, and building access.

As the new foundation wall is constructed, space is allocated for one of the  flood vents.

The new foundation walls are at least four feet below grade, as per proper building code for our location.

In the picture above, our son, Luke, is standing on a ruble pile that was once our basement. Behind him space has been allocated in the foundation wall for a flood vent, a window, and space to remove the steel beams that currently support the house. Once the house is lowered back down onto the new foundation, the gaps for the steel beams will be closed. The flood vent demonstrates where the new floor will be poured. The wooden cribbing will be removed once the house sits on the foundation and is no longer supported by the steel beams supplied by the lifting company.

More things I never planned to learn:  The foundation walls are made of cement cinder blocks fitted with steel rebarb. The rebarb serves to support the cinder blocks along with cement that is meticulously poured down each row of blocks, as seen in the picture below.  The walls will also be a formidable opponent for any flood. (Again, our house does not incur high velocity flooding).

interior of cinder blocks

interior of cinder blocks showing the poured cement

Just in case you can’t get enough information on basements:

http://mccainconstruction.net/basements/ 

http://www.weather.com/news/tornado-central/why-dont-oklahoma-homes-have-basements-20130521

Big Changes to Flood Insurance Rates

 CHANGES TO FLOOD INSURANCE PROGRAM: We paid our first revised flood insurance premium today – a 20% increase from what we paid last year for the same level of coverage. Our premiums will continue to rise for the next four years, up to 25% at a time. Why? The National Flood Insurance Program (NFIP), a federal program under FEMA, is broke. With a debt of more than 18 billion dollars, the program is not sustainable. Who covers this huge deficit not covered by flood insurance premiums? Taxpayers do.

Wind and Flood damage from Hurricane Sandy - 2012

Wind and flood damage from Hurricane Sandy – 2012

Brief History of Flood Insurance: In 1965, Hurricane Betsy struck New Orleans. The ensuing floods destroyed numerous homes. No flood insurance existed to help the homeowners recover. Traditional insurance companies did not want to offer flood insurance because there were no ratings, models, or statistical probabilities available. So the government stepped in making flood maps, models, and generating the necessary statistics to account for the probability of a flood event. The National Flood Insurance Program was formed in 1968. It allowed individuals to purchase insurance (via insurance agents) through the government to cover floods.

In 2005 Katrina devastated New Orleans and much of the Gulf Coast. The cost of recovery proved to be greater than incoming insurance premiums could cover. FEMA was forced to borrow 16 billion dollars from the government to cover the cost. This was a major set back to the program. Something had to change.

In July 2012, Congress signed into law extensive changes to the National Flood Insurance Program (NFIP). This was before Super Storm Sandy served up a path of destruction, covering an area the size of Europe, in late October of 2012. The Biggert-Waters Flood Insurance Reform Act of 2012, as it is called, has significant implications for anyone who has flood insurance. The short summary: your flood insurance rates are going to go up. These rates are allowed to go up as much as 25% per year (for the next 5 years) until actuarial rates (estimate of the expected value of future loss) are achieved.

How high your rates will go up will vary depending on your location and situation. The short list of homeowners who can expect to see their rates rise dramatically:

  • residential property that is not the primary residence of an individual (vacation homes)
  • any severe repetitive loss property (four or more claims over $5,000 or two claims that exceed the value of the property)
  • flood damages that cumulatively exceed the fair market value of the property
  • any new policy or newly purchased property in high risk flood areas

The taxpayers cannot continue to subsidize people whose homes are known to be in high-risk floodplains. The rates have to go up to cover the costs and risks inherent in living in these areas. Ultimately, some homes will have cost prohibitive rates resulting in homeowners who can no longer afford the flood insurance premiums. There are no easy or simple remedies.

Flood insurance rates are determined by the home’s base flood elevation. A house above the base flood elevation entitles the owner to pay a lower flood insurance premium – a very good reason to consider lifting your house.

Houselifted well above the base flood elevation for this property

House lifted well above the base flood elevation –  for this property

For more information on how your flood insurance rates will be impacted:

http://www.floodsmart.gov/floodsmart/pages/flooding_flood_risks/map_changes_flood.jsp

A video summary of the Biggert-Waters Reform Act:

 http://www.youtube.com/watch?v=tpeqSQr3ngY&list=UUHMck7Qh7gAf7o4qnPu84IA&index=2.

Flood Vents on an Elevated House

FLOOD VENTS: If you’re considering elevating your house, chances are pretty good that you live in a special flood hazard area (SFHA). By “special” they (FEMA) mean that your house gets rocked by a flood every now and again and therefore requires a homeowner to adhere to strict FEMA building codes. Once your house is elevated, the foundation will continue to be subjected to an occasional pummeling by floodwater. In effort to eliminate the destructive force from a flood, flood vents will be added to the foundation walls.

Flood vent tucked into the landscaping

Flood vents tucked behind the landscaping

WHAT IS A FLOOD VENT? Simply put, a flood vent allows for a free flow of flood water in and out of a home’s foundation walls. They serve to equalize the pressure on both sides of the foundation walls, decreasing the chance of significant damage.

So while it may seem counterintuitive to welcome the flood water in, it’s the best way to protect your foundation in the long run. These vents are placed around the perimeter of the house near the ground, but can easily be blended into the surrounding landscape.

Interior view of flood vent

Interior view of flood vent

This style of flood vent is only appropriate for hydrostatic pressure resulting from slow moving/rising water. Homes located near the ocean or a fast moving river would be subjected to hydrodynamic forces and would therefore require an entirely different foundation system (break-away walls or an open foundation with the house built up on pylons).

As the new foundation wall is completed, space is allocated for a flood vent.

As the new foundation wall is completed, space is allocated for a flood vent.

These vents are an important part of the National Flood Insurance Program regulations that apply to all new build, repair of substantially damaged homes and substantial improvement of existing homes in SFHA’s. Flood insurance rate maps (FIRMs) put together by the NFIP determine which properties are located in a SFHA based on base flood elevations. Confused? Let’s try an acronym you may be more familiar with instead …

SUMMARY: Install flood vents around the perimeter of your elevated home or your foundation walls may by S.O.L. with subsequent flooding events.

Wet Flood Proofing: an Oxymoron?

WET FLOOD PROOFING: This is generally the least expensive floodproofing technique, but it’s also the least effective in the long term. The strategies here result in a home still suffering through a flood, but strive to decrease the damage to the home and your contents.  Techniques that fall under this definition include installing flood vents to minimize structural damage, relocating the electrical panel and the utilities above the base flood elevation (BFE), anchoring the foundation and any fuel tanks to minimize movement or destruction and protecting your personal belongings.

Elevated air handlers

Elevated air handlers

This technique requires active participation on the part of the homeowner. Many times, if not most, there are days of warning prior to a flood hitting your home. With the exception of a flashflood and possibly a catastrophic tsunami, you have time to move your personal belongings out of harms way. Get busy! Move your stuff!

Using cinder blocks to protect belongings one idea.

Using cinder blocks to lift items above projected flood levels is one idea.

PROTECT YOUR CONTENTS: A simple idea to protect personal belongings is to utilize a section of your home that does not flood, e.g, a second floor, and start by moving everything upstairs. Family pictures, important documents, anything you don’t want to be destroyed – move it. We’ve used this method several times. It’s exhausting, but effective. Another idea to protect your home’s contents is to rent out storage space at a storage facility. Most times your flood insurance will cover these costs after a flood warning has been issued.  We utilized this option during a flood threat and basically emptied the entire family room (couches, tables, toys, books, etc.). This option provides great piece of mind, but a bit more planning. During the last flood event, before we decided to lift our house, I decided if I had to move all of my furniture anyway, I may as well move it out of the house altogether. That way it would be easier to start the clean-up and rebuilding process.

Wet Floodproofing will still leave you with a big clean-up effort, requires active participation just prior to the flood event, and offers no reductions in flood insurance premiums. It’s better than nothing – much better. When the water’s rising, do something – even if it’s just moving all of the items in your house upstairs.

Establishing New Elevation Height

Our builder, architect, and lift expert all reviewed the proposed new elevation height, comparing the blueprints with the tree markings (see picture below).

Bottom to top: Base flood elevation, new family room height, new front of house height.

Bottom to top: Base flood elevation, new family room height, new front of house height.

For the construction crew to actually work underneath our house while building up the foundation walls, initially the house will be lifted a foot higher than the intended height. The house will sit in the air, supported by steel beams, wood pylons and hydraulic  jacks before being lowered back down onto the newly built foundation.

Base Flood Elevation

Tell-tale signs of change

Tell-tale signs of change

Three markers were placed in our tree highlighting the key elevations of our property. They were determined based on our city codes and FEMA. They had to be measured for accuracy and placed by a surveyor. The top of each pink ribbon is the official line.

The lowest ribbon defines the base flood elevation (BFE) for our property. The BFE is the 100-year flood line or a flood that has a 1% chance of occurring in any given year.

“The BFE is the regulatory requirement for the elevation or floodproofing of structures. The relationship between the BFE and a structure’s elevation determines the flood insurance premium.” (source: FEMA)

Our community additionally stipulates that any elevation project lift  2 feet higher than the BFE.

The middle pink ribbon illustrates what will be the new elevation of our back family room. The highest pink ribbon illustrates the what will be the new elevation of the front of our house.

For more information check out:

What is my Advisory Base Flood Elevation (ABFE)?