FEMA and Biggert-Waters - The sky is falling!

On July 6, 2012, the Biggert-Waters Flood Insurance Reform Act of 2012 was signed into law. In addition to reauthorizing the National Flood Insurance Program (NFIP) through September 30, 2017, the bill brings several substantive changes to the program, including several that alter the way premium rates are calculated.

What was the need for this new legislation?  Perhaps the editor of local newspaper, The WAVE. said it best when he wrote "The National Flood Insurance Program was bankrupt and Congress set YOU up as their piggy bank!"

These changes mean large increases NFIP premiums. It is critical that people repairing and rebuilding structures after storms understand these changes so they can make sound and informed decisions about whether or not they want to place additional resources in harm’s way, and so they can understand the financial implications of doing so. 

Following are two big changes to the NFIP everybody recovering from a storm should be aware of:

CHANGE 1: Higher (translation= exorbitant!) Premiums for Buildings Below the Base Flood Elevation

Congress (via this Biggert-Waters Act) has instructed FEMA to stop giving premium discounts to properties that are below the BFE, even if they were up to code when built. 

CHANGE 2: Pre-FIRM (Flood Insurance Rate Maps) and Grandfathered Rates Phased-Out

In the past, many structures were allowed to keep their original flood-risk rating, even when conditions and improved understanding had changed. This generally occurred when:

1. The building was built before 1975 or before the community (governing jurisdiction) received its first Flood Insurance Rate Map (FIRM). These buildings have often been insured at Pre-FIRM rates, unless the owner opts out of this option.
2. The building was built Post-FIRM, in compliance with a FIRM, but a more recent FIRM shows the building to be at greater risk of flooding. These buildings have been grandfathered administratively, and were allowed to keep the rate-class (flood zone and building elevation relative to BFE) that applied at the time of construction.

Both subsidies largely end with the implementation of the Biggert-Waters Act, which specifies that there will no longer be subsidized rates for:

1. Newly purchased property
2. Property where NFIP coverage was deliberately allowed to lapse
3. Properties receiving an offer of mitigation assistance following a major disaster, or in connection with a repetitive loss property
4. Repetitive loss or severe repetitive loss properties
5. Businesses
6. Non-primary residences
7. Substantially damaged property
8. Property (at least) 30% improved

In short: Subsidized insurance rates will be phased out for all properties except Pre-FIRM primary residences that have not lost their qualification for the rate.

In addition to the Biggert-Waters Act, FEMA then comes along and proposes new Base Flood Elevation Maps which will require homeowners, who are presently expending what little funds they have to return their living areas destroyed by the storm surge to a habitable condition, to raise their homes here in Broad Channel to, in most cases, a 15 foot BFE, adding anywhere from $50,000 to $1000,000 more in storm related expenses.

Many people, faced with this extraordinary financial hardship, are now faced with a "Catch 22" situation - "Do I go bankrupt quickly and raise my house or do I simply sink slowly into horrendous debt by paying the exorbitantly higher insurance rates mandated by FEMA and this law?" 

There are also some homeowners who are ready to throw up their hands in disgust at this government bailout of FEMA at their expense and walk away from their homes.

We are faced with a very dangerous set of government imposed regulations which could ultimately destroy the viability of our Broad Channel community, something even Super Storm Sandy could not do!

If we are to have any chance of preventing our Broad Channel community from becoming a town of nothing more than abandoned and foreclosed houses and businesses sitting on a small island in Jamaica Bay we are all going to have to come together, with one voice and with one goal. The Biggert-Waters Flood Insurance Reform Act must be either repealed or revised to allow continued subsidies for flood insurance in our area and the FEMA ABFE maps must changed to rid Broad Channel of their new proposed "V" rating.

What can you do?

The New Jersey activist group "Stop FEMA Now" has registered a petition with the White House requesting that the Biggert-Waters Act be repealed.  You can register and sign this electronic petition by clicking on the "Sign the Petition Here" icon on the top right hand side of this page.

You can call or email our elected representatives and tell them that they must act to provide us with relief in this matter.  Senator Schumer's, Senator Gillibrand's and Congresman Meeks phone numbers and emails are listed right under the petition box.

You can talk to your friends and neighbors and make sure that they are aware of this issue and attempt to have them sign the petition and call or email their representatives also.  

Attend the next Broad Channel Civic Association meeting to make sure our voices are heard by the politicians who attend these meetings.

In closing, I hate to appear like Chicken Little running around yelling "The sky is falling" but in this case, the sky may very well be dropping on this town like a stone if we do not do something about it.

Your neighbor,

Peter J. Mahon