2012-12-20 / Front Page
FEMA maps: higher houses, and costs
Flood insurance premiums expected to rise to reflect risk
Plans to rebuild many homes and businesses damaged or destroyed by superstorm Sandy will hinge on raising the structures an additional 1 to 5 feet above sea level to comply with new flood maps made public Dec. 15 by the Federal Emergency Management Agency (FEMA).
Thousands of residents who live in flood zones may also be in for flood insurance rate increases in the coming months due to changes to the agency’s National Flood Insurance Program (NFIP).
FEMA released its long-awaited new Advisory Base Flood Elevations (ABFEs) last weekend for most of the New Jersey coastline.
The maps, according to Marc Ferzan of the Governor’s Office of Recovery and Rebuilding, will allow communities to make informed decisions based on the latest scientific data as they attempt to rebuild safer and stronger.
“The focus is on smart rebuilding, mitigating the impact of future storm and flooding events,” he said in a Dec. 14 teleconference with members of the media.
The ABFEs reflect a general rise in flood levels over existing Flood Insurance Rate Maps (FIRMs), which according to FEMA Risk Analysis Branch Chief Ryan Pietramali were compiled using 20- or 30-year old data.
New FIRMs, which have been in the works for two years, are expected in mid- 2013. If approved by local governments, those maps will require homes and business in most designated flood zones to be raised an additional 1 to 5 feet above sea level.
In the meantime, FEMA is encouraging local officials and residents to apply the ABFEs during the rebuilding process so they will not encounter complications when the new FIRMs are established.
Residents can access specific ABFE data for their properties by entering their address on the FEMA website, www.region2coastal.com. New flood elevations and other information can be viewed and printed, allowing homeowners and others to provide the information to local building departments and insurance providers. William McDonnell, deputy hazard mitigation branch director for FEMA, said during the teleconference that the flood map changes are not a result of Sandy, as the data used to create them was compiled prior to the Oct. 29 storm.
However, according to FEMA spokesman Christopher McKniff, 79 percent of the mapped ABFE areas were impacted by the superstorm.
McDonnell said that the new ABFEs empower residents and municipalities to work together in protecting themselves against future storm damage.
“Citizens and communities have to take ownership in this,” he said. “They have to know their risk, know their role, and take action.”
McDonnell said residents in need of funding to raise their homes or businesses may have access to Increased Cost of Compliance (ICC) coverage through their flood insurance policies or hazard mitigation grants available through state and federal agencies.
In other areas, the ABFEs have changed the flood zone classification for a number of properties.
Many houses and businesses that formerly were located in “A” zones, or stormsurge flooding areas, are now located in “V” zones, indicating a high-velocity wave risk during storms.
Other properties located in low- to moderate risk “X” zones are now located in “A” zones, a change that would require the owners of those properties to purchase flood insurance in some areas.
Both “A” and “V” zones are considered part of the 100-year floodplain, an area witha1percentannualchanceofflooding. “V” zones also carry a 26 percent chance of flooding during the life of a 30-year mortgage.
In towns that participate in FEMA’s National Flood Insurance Program (NFIP), homes and businesses located in both “A” and “V” zones are required to have flood insurance.
Homeowners, business owners and renters in these zones will be most affected by the new ABFEs as they are strongly urged to raise their homes above new flood elevations, which in some instances now lie more than 18 feet above sea level.
Owners of higher-risk properties are also being encouraged by FEMA to fortify pilings, install breakaway walls and otherwise protect their homes from future flooding.
Other properties, said McKniff, will actually see a decrease in their flood risk under the new maps.
Properties still in “B,” “C” or “X” zones — which have a low to moderate chance of flooding — do not have recommended base flood elevations.
Town officials are now currently reviewing the new ABFE maps as FEMA strongly encourages them to implement the new flood levels and zone designations into their municipal building codes.
And while both McDonnell and Pietramali said the ABFEs will not lead to increased flood insurance premiums, a number of changes to the National Flood Insurance Program (NFIP) may lead to increased rates for many throughout 2013.
At a recent rebuilding conference at Monmouth University, global reinsurance industry executive Megan Linkin spoke about the NFIP’s current financial struggles, catalyzed by a number of costly weather emergencies in the last decade.
“Since 2001, five multi-billion dollar losses have occurred, leaving the NFIP in $18 billion of debt,” she said at the Dec. 7 conference.
“The NFIP has borrowing capacity up to $20 billion. If Sandy has caused $12 billion in losses, there is going to be a shortfall.”
In recognition of this growing financial strain, the Biggert-Waters Flood Insurance Reform Act was enacted in July. The law, according to the FEMA website, calls for the NFIP to “eliminate flood insurance subsidies and discounts and to increase rates to reflect actual flood risk.”
Beginning on Jan. 1 and continuing throughout 2013, certain properties and structures will lose discounts, subsidies and grandfather clauses on their flood policies, leading to rate increases of up to 25 percent per year.
Late next year, according to the website, the NFIP will begin applying “full-risk” rates to newly purchased properties. Beginning in 2014, premiums will increase for properties with flood maps that were changed or created after Bigger-Waters was enacted.
“Even if you build to minimum standards today,” reads the website, “you will be subject to significant rate increases upon remapping if your flood risk changes in the future.”
Pietramali said that by adopting and even exceeding the ABFE recommendations, towns and residents would save money on flood insurance policies going forward, as they will comply with cost-cutting NFIP requirements.
But in some places, he added, premiums are going to go up no matter what.
“In some special flood zone areas, it’s very likely that you will pay more for your flood insurance going forward.”