Flood Maps & Flood Insurance Hit Homeowners in Unexpected Ways
Today’s NPR article: Overhaul Of A FEMA Program Has Homeowners Calling Congress discusses the dire consequences new FEMA flood maps in conjunction with the newly implemented NFIP flood insurance rates is having.
An issue not talked about is the requirement for communities who opted into the flood coverage program to follow the mitigation requirements established by FEMA/NFIP, which are strictly enforced. So new construction or substantially remodeled homes must comply with the newly revised flood map elevation height requirements. This means new home construction or those remodeled (50% rule) must be elevated to new established heights which are not likely to flood. Sound good, but there continues to be little to no flood coverage for the ground floor area of these elevated homes that are brought up to the newly established elevation standards as policies are now written. If a homeowner ads on or builds out this area after a CO (certificate of occupancy) inspection, the build-out would be excluded by the flood adjuster. These homes still are required to have flood insurance if they have a mortgage and in fact become “donor homes”, which means they pay more in premiums than they will get back.
The issue boils down to older homes that local governments permitted and most likely encouraged for economic development purposes over the years. The folks who bought them, raised families, many retired in them but all relied on the Federal Government’s promise to provide affordable flood insurance. These are not million dollar homes, but more typically owed by working families or retired folks.
Was this program mismanaged? Probably, it's a government program. But let’s not destroy the folks financially who relied on their governments promise. As aside it will be interesting to hear the positions of some of the politicians against a repeal of B-W 2012 should their communities flood when this winter snow melts this spring. Yes, we need some type of flood insurance reform, but not with a sledge hammer effect of the Biggert- Waters act. Let’s study the issue thoroughly with the plan that was originally contemplated back in 2012. Let us know what you think.