Tag Archives: fema

Private Insurance vs. FEMA

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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 Costs Remain High post House Elevation

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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

 

The Lord has Spoken: Giving Away Millions of Dollars

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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.