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Senate Passes Flood Insurance Bill

On Jan. 30, 2014, the United States Senate voted 67-32 to approve the Homeowner Flood Insurance Affordability Act (S. 1926), sponsored by Senators Menendez (D-NJ) and Isakson (R-GA).

This bipartisan legislation, an NAR member priority, calls for a 4-year timeout on rate increases triggered either by a property’s sale or a flood map update for a property with previously grandfathered rates. NAR provided Congress with expert testimony suggesting that many of these increases are excessive and inaccurate. The bill also creates a flood insurance advocate within the Federal Emergency Management Act (FEMA) to investigate home owner complaints of multiple different or excessive rate quotes.

The Senate vote sends the measure to the House of Representatives, where Reps. Grimm (R-NY) and Waters (D-CA) have already built an impressive list of 181 co-sponsors in favor of the bill; a total that is 30 votes shy of a House majority NAR will redouble its efforts there to persuade the House leadership to bring a similar bill up for a floor vote at the earliest opportunity.

Raise the house, lower the flood risk!

ATLANTIC CITY, N.J. – Oct. 24, 2013 – Eileen Benner says elevating her home in Atlantic City, N.J., was a “no-brainer” after it suffered extensive flood damage during Superstorm Sandy. “I would tell anybody who has the money available to go ahead and do it,” she says.

John Paynter’s Long Beach Island, N.J., vacation home now stands 13 feet higher than it did before the storm a year ago. He, too, says he’s glad he did it, though the process itself was nerve-wracking: “You heard a lot of cracks and creaks.”

Nationwide, insurance claims for flooding damage totaled on average more than $3 billion annually from 2003 to 2012, according to the National Flood Insurance Program (NFIP). And rising sea levels and more severe storms mean that in some areas, more homeowners are finding themselves in flood zones for the first time, or in higher-risk ones.

The most common way to reduce the risk: elevating the home, the NFIP says.

The process can cost a lot – more than $100,000 in many cases, depending on the home’s size, location and foundation. But homeowners may be eligible to get some help from flood insurance policies and grants.

Flood elevation maps determine whether a property needs to be raised and by how much. Homeowners in high-risk zones who choose not to raise their homes could see their flood insurance premiums skyrocket.

Roderick Scott of L&R Resources, a Mandeville, La., company that does home elevations, recommends lifting a house 1 or 2 feet above the minimum needed to get a flood elevation certificate.

“You don’t want to elevate structures more than once in their lifetime,” he says.

Homes with an open foundation – with a basement or crawl space – are the easiest and least expensive to raise. “It’s easy to get underneath and get the structure of the house from underneath and lift it up,” he says.

Raising those built on a slab foundation takes more time and money. “You have to open up walls and remove lower cabinets,” Scott says.

Any air conditioning and heating systems in the basement must be relocated, as well as power and other utilities. “They have to go on or above the main level of the structure so they won’t be damaged,” Scott says.

And then there’s the question of how you’ll get up to the higher house. Where will you put the stairs, for example?

“A lot of seniors live at the beach. They may need to integrate a lift,” says Scott.

He uses a hydraulic machine to jack up a house, and says the process is so smooth that he once put a glass of red wine on a tabletop. “Not a drop was spilled,” he says. Still, he advises people to take pictures off the walls and pack up any valuable crystal.

A house may be set down on pilings or cinderblocks, depending on the height.

It’s likely that millions of homes will have to be raised based on redrawn flood maps nationwide, Scott says. However, Dan Watson, a spokesman for the Federal Emergency Management Agency, says it’s difficult to say how many and where: “In some cases the risk has gone down and in some cases it has gone up.”

In 2012, Louisiana had the most flood damage claims, followed by New Jersey and New York.

In Brick Township, N.J., Mayor Stephen C. Acropolis says about 8,500 homes suffered water damage during Sandy, and that more than half of those will have to be raised because of redrawn maps. He says many people got temporary certificates of occupancy that give them four years to elevate.

His own home, he says, is “a 51 percenter – that means your house was damaged to more than 50 percent of the value of your home. And so is my son’s and a lot of people in my neighborhood.”

He’s not rushing into elevating his home, though. “We’re going to get prices, we’re going to deal with engineers,” he says. “I don’t see a ton of people elevating their homes right away unless they had the money.”

Benner felt she didn’t have a choice. The water in her duplex after Sandy was a foot deep. It cost $21,000 to lift the house, she says, and she expects the total bill to be $130,000 to $140,000. Part of that was offset by a clause in her flood insurance policy that gave her $30,000 to meet the new height requirements.

“By the time I’m done, my base floor is going to be about 12 feet” higher than it used to be, she says. “I feel comfortable.”

After Paynter’s house was lifted, “I had to build stairs. I had to build a front porch. I had to reattach the utilities,” he says. He also built a new chimney and redid the house’s flood-damaged interior.

Total cost? He estimates $140,000.

He moved back in in August. “I’m very happy,” he says.

Fla. backs Miss. lawsuit to block flood insurance hikes

Gov. Rick Scott, Attorney General Pam Bondi and Chief Financial Officer Jeff Atwater announced that Florida would file an amicus brief, or “friend of the court” brief, in the Mississippi Department of Insurance’s lawsuit aimed at delaying flood rate increases outlined in the Biggert-Waters Flood Insurance Reform Act.

The lawsuit asks a federal judge to find that the Federal Emergency Management Agency (FEMA) failed to deliver a homeowner affordability study of higher flood insurance rates by April 2013 as required under Biggert-Waters – and it asks a judge to block the current rate increases until that study has been completed.

Bondi says Florida decided to support the Mississippi lawsuit rather than file its own lawsuit on the off chance that the federal government will quickly address the situation, which could impact about 270,000 Florida property owners. However, the state may take other actions in the future.

“We haven’t ruled anything out at this point, but right now we’re joining Mississippi, and hopefully they’ll be successful,” Bondi says. “And again, Congress needs to take action and the White House needs to take responsibility for this and to protect Floridians.”

The 2012 act requires FEMA and other agencies to make a number of changes to the way the National Flood Insurance Program is run, including raising rates to reflect true flood risk and to make the program more financially stable.

But Realtors and bankers have expressed concerns about the effects a phase-out of federal subsidies could have on the housing market – notably older properties – and the state’s economy.

The Mississippi lawsuit names the U.S. Department of Homeland Security and FEMA, one of its agencies.

However, FEMA Director Craig Fugate told a U.S. Senate Banking subcommittee on Sept. 18 that the study would take about two years to complete, and he said his agency is powerless to stop the flood rate increases.

“I need help,” Fugate told the subcommittee. “I have not found a way to delay (the rate increases) … without some additional legislative support.” Fugate, a former Florida emergency-management director, told the subcommittee members there is “no provision for affordability in (the Biggert-Waters) law.”

In June, the U.S. House voted to delay parts of the act, including putting a one-year hold on the rate changes FEMA is rolling out. The House also approved a delay in the removal of a longstanding grandfather clause that has allowed subsidies to be carried over when properties are sold.

However, a bipartisan Senate proposal to delay the rates for one year remains on hold.

Because of federal inaction, the Florida Senate Banking and Insurance Committee floated the idea that Florida could withdraw from the federal program, either by altering regulations to attract more private insurers to provide the coverage or through establishing a state-backed agency similar to the Florida Hurricane Catastrophe Fund.

Source: News Service of Florida

Flood Insurance FAQ's

Many older homes in flood zones have long benefited from a subsidy that kept flood insurance rates very low. Starting next month, those homeowners will typically see annual rates jump more than 25 percent, including a fee for a new reserve fund.

Can you do anything to fight higher rates? Yes!

– Obtain an elevation certificate to show how high your home is compared with flood levels. There is an initial cost, but it may help reduce your rate.
Murphy’s Land Surveying specialize in surveys and elevation certificates,

Review your flood zone maps to see your property’s current flood risk and how close it is to a potential change in risk status if a new map is adopted.

And don’t let your policy lapse, this could be a trigger for a big rate increase.

Call Rachel Keeser at Commonwealth Insurance of Seminole on 727-392-1090 or email
and she will be happy to give you a competitive flood quote after you have an elevation certificate.

Other Links:
Interactive Map for NFIP Subsidized Policies by State and County
FEMA: Homeowner’s Guide to Elevation Certificates
FEMA: Flood Insurance Rate Maps
FEMA: Flood Insurance Rate Maps