I did an el. cert today, and I'm sure the poo is going to hit the fan tomorrow. It was a big rush because they want to close Friday. In this case, the property where the house was built was Zone C when it was built in 2004. There was a zone AE on the edge of the property, BFE 88', but the records show the house was considered to be in the Zone C. In 2012, the maps were revised, and the Zone AE expanded, and the BFE RAISED 8.5 FEET! Now, the house that was built in a Zone C, and 6 feet above the nearest BFE, is 2.5 Low.
This is a classic case of where the old Grandfathering rules could be applied. Unless there is still time to get in "grandfathered" policies, there we be unhappy realtors tomorrow. What's going to happen to these houses when buyer after buyer walk away?
I agree completely. There will be many angry home owners. I have seen a few already. "I didn't need this expensive flood insurance when I built my house, why is flooding an issue now just because I am refinancing?" is a common question.
This happened in our area last year. Huge deal...we did about 30 elevation certs and about the same in LOMA's. Easy work if you have a good RTN in your area. Get yourself in good with the local engineers too, they referred about half the work to us, and we referred the more advanced flood work to them.
Also make sure you are buy the local FIS and get familiar with it. We have found numerous places where the map shows one elevation, the FIS profile shows another, and the flood tables scale to yet another. You can challenge the map easily and we have even challenged the FIS profile a few times successfully.
Tom
I heard that the "grandfathering" on insurance rates were going away.
Most of us in any way involved with flood issues recognize this is going to be very traumatic for a lot of people.
It's not really FEMA; they're just the agency having to enforce the Congressional mandate.
The National Flood Insurance program has a 20 billion dollar hole in it, due in large part to Katrina and Sandy. Congress passed the Biggert-Waters Act last year mandating that this deficit be paid back to the treasury.
Basically no more flood relief subsidies for those choosing to live near the water.
The only real relief from this will need to come from political action. I'm reminded of the de-certifying of river levees and the resulting flood risk that huge groups of people got sucked into because of that. That resulted around here in the formation of levee districts that could raise taxes to upgrade the levees to certifiable status.
But one way or another, people are going to have to increasingly bear the financial costs of flood risk themselves.
Yeah, that's exactly it. Last year, this would not have been problem and they'd be locked in an "in compliance" rate.
I'm told both the buyer and seller were surprised to hear it's in a flood zone (I guess the sellers had kept the information from when the house was built that shows it was not), hence the last minute rush for the elevation cert. Now, they may get a rate 2 or 3 times what they were expecting since the house is not in compliance with the new map.
I can't see how this is a fair practice when the sellers relied on FEMA maps to build their house in the first place, and built 6 feet higher than the nearest BFE, at that. It seems like a completely unfair situation to make houses unmarketable, or perhaps only marketable to cash buyers at a steep discount, after they are built in compliance.
> But one way or another, people are going to have to increasingly bear the financial costs of flood risk themselves.
That's exactly what needs to happen.
Louisiana is in a crustal movement area, and enormous parts of South Louisiana are SUBSIDING. It's really biting people in the butts when new surveys show real changes in elevations that are significantly lower than in previous decades. There's no cure for that when the ground actually changes and flood-prone area increase in the real world.
Moral of the story: Buy property north of I-10 if you intend to live several more decades.
> > But one way or another, people are going to have to increasingly bear the financial costs of flood risk themselves.
>
> That's exactly what needs to happen.
What is that stat about the percentage of Americans that live within 50 miles of a coastline? I think it's pretty high.
And what about those who live in 'tornado alley' areas? I bet that's another good chunk.
Add in those in earthquake prone areas....
Or wildfire sensitive spots..
Or blizzards...
I guess "flood insurance" gets a lot of attention because it's easy to generalize it as 'those rich people living on the water' ... but I'd like to see the breakdown of insurance claims from the comparative other natural disasters.
for andy.
from link
From 1991 to 2010, hurricanes and tropical storms made up 44% of total catastrophe losses, followed by tornado losses at 30%, winter storms at 7.4%, terrorism at 6.8%, earthquakes and other geologic events at 5.1%, wind/hail/flood at 4.1%, and fire at 2.2%. Civil disorders, water damage and utility services disruption combined represented less than 1%. Each year about 6% of homeowners file claims. (I.I.I.)
Flooding is the most common natural disaster; however, coverage for flood (defined as rising water) is excluded under most standard homeowners policies. For cars, flooding is covered under the comprehensive portion of most standard auto policies. Homeowners and renters who live in high-risk flood plains and whose communities participate in the National Flood Insurance Program, or NFIP (administered by the federal government) can buy special flood insurance through a company or agent.
http://www.rmiia.org/Catastrophes_and_Statistics/catastrophes.asp
This property is way inland and 93' NAVD, and not near a lake or river. It's in a depressed area that probably pools water during a major storm. I'm not disputing FEMA's determination that the house is high risk, it looks to me like it is. My problem is the way they are implementing these changes, and basically singling out a small percentage of houses and asking them to pay outrageous rates, rather than raising everyone's rate by a small percent. And let's not forget that the reason this house was allowed to be built like this was due to apparent inaccuracies in their previous FIRM.
In the future, the only options for these PreFIRM and Grandfathered homes on sale will be to find a cash buyer that will self-insure or modify the house (discounted, of course), lift the house ($30,000 - $40,000), or bulldoze the house and rebuild. I can't help but wonder how many Florida retirees are banking on the value of their home to get them through retirement/nursing home care.
The PreFIRM and Grandfathering policies made sense. It doesn't make sense to me to slap punitive, and federally mandated, insurance rates on people who built or bought houses that complied with the laws and building codes at the time of construction.
And, of course, the real kicker is that these folks could pay to have their house lifted or rebuilt, but who's to say that 10 years from now the maps won't get revised again and make their new home out of compliance?
Looks like people are starting to catch on ...
From Bayou Gauche, La yesterday:
>The Taylors gave U.S. Senator David Vitter (R-La.) more than 1,100 keys to homes and businesses as part of their argument that flood insurance will become too expensive, and people still paying mortgages will not be able to afford to remain in their properties.
>"Take them back to Washington, tell the legislators there that unless these laws change, these keys are useless to us," Mr. Taylor said.
>They are blasting the Biggert-Waters Act, signed into law last summer. It eliminates low flood insurance rates and subsidies for high-risk areas and scraps a grandfather clause for properties built according to earlier codes and standards.
>"It's kind of hard when you tell somebody, 'Here's the rules, follow the game, do what you're supposed to do,' and then come back afterwards and say, 'Oh no, that's not right. Here are the new rules and here's the new rate.' $28,554... that's insane, that crazy, it's criminal," Taylor said.
I couldn't agree more.
http://www.fox8live.com/story/22285769/residents-and-business-leaders-blast-flood-insurance-hikes
Looks like people are starting to catch on ...
Here's a sample someone put together to demonstrate...
Last premium: $388/yr
New Premium: $2956/yr
If the house is sold to someone else: $18,000/yr
... in other words, the house is now unsellable.
http://www.slld.org/images/NFIP-Biggert_Waters_Effects_207_and_205.pdf
