NFIP Flood Insurance

Long Island flooding

By Rosanne Salvatore And Kathryn Kattalia / NEW YORK DAILY NEWS

An aerial shot shows devastation along the New Jersey coast following Sandy’s destruction.

FLOODFLOOD• INUNDATION OF NORMALLY DRY LAND

– OVERFLOW OF INLAND/TIDAL WATERS– RAPID ACCUMULATION/RUNOFF IE... (EXCESS RAIN,WINTER MELT,WATER

MAIN BREAKS ETC...)

– MUDFLOWS

• General and temporary condition

• Partial or complete inundation

• Surface waters from any source

ELEMENTS OF RATINGELEMENTS OF RATING

Location

Emergency/Regular Program

Flood Zone

Coverage Occupancy

Amount Foundation

Deductible # Floors

Date of Construction

Pre/Post Firm

Elevation Certificate (Required in SFHA)

Maximum CoverageMaximum Coverage

(Photo: Reuters) Stirred up by Hurricane Sandy on Saturday, an Atlantic Ocean wave crashes over a wall of sandbags protecting houses on the east side of Ocean Isle Beach, N.C.

Maximum Coverage LimitsMaximum Coverage Limits

Regular ProgramResidential* $250,000 Building

$100,000 ContentsNon-Residential

$500,000 Building$500,000 Contents

RCBAP $250K per

Unit/Replacement Value $100,000 Contents

Emergency ProgramResidential

$35,000 Building$10,000 Contents

Non-Residential$100,000 Building$100,000 Contents

RCBAP $100,000 Building $ 10,000 Contents

* On 6/1/2014 Other Residential on Std Flood Policy to increase to $500 ,000

RCBAP

Galveston, TX, September 16, 2008 -- Aerial view along Seawall Boulevard after Hurricane Ike. Jocelyn Augustino/FEMA

Photos provided courtesy of FEMA

RESIDENTIAL CONDO BUILDING ASSC. RESIDENTIAL CONDO BUILDING ASSC. POLICY(RCBAP)POLICY(RCBAP)

• 75% of Floor Area For Residential Use

• $250K per Unit or the Replacement Value (Whichever is Less)

• 80% Co-Insurance Clause

• Replacement Value includes the Foundation of the Building

• Replacement Value needs to be updated every 3 Years

• Building RCV/Contents ACV

• Need Proof of Replacement Value/2 Photos/By-Laws

Flood Zones

Riverhead, Long Island, after the rains

Flood ZonesFlood Zones

• Special Flood Hazard Areas– Zones beginning with A or V– A, A1-A30, AE, AO, AH, A99, AR

• Rivers, Lakes, Low Lying Areas

– V, V1-V30, VE• Ocean, Bay

– Mandatory purchase applies– “100 YEAR FLOOD”

• 1% percent annual chance the land could be inundated by a flood

Everyone is in a Flood ZoneEveryone is in a Flood Zone

FLOOD ZONESFLOOD ZONES

• Moderate And Minimal Flood Hazard Areas (non-SFHA)

– Zone B, C, OR X

– 30% claims paid in these zones

– Insurance is optional

– “500 YEAR FLOOD”

– PRP • Can not have more than 2 flood claims or disaster

relief from FEMA

Separate Policy for each separate Building

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Green River LIMIT OF DETAILED STUDY

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FIRM Panel 0001C - Specific Location

ZONE AE

ZONEA

CORPORATE

LIMITS

NApproximate Scale In Feet

500 0 500

The structure is located on Vallejo Ave. 200 feet upstream of the Sutter Blvd. and Vallejo Ave.intersec-tion.

200 feet

ZONE X

ZONE X

Flood Zones, Construction of a Building & Premium

Pre-FIRM vs. Post-FIRMPre-FIRM vs. Post-FIRM• Flood Insurance Rate Map (FIRM)

• PRE-FIRM– Constructed prior to the initial FIRM– Prior to 10/1/2013 elevation certificate not required to

rate policy (Subsidized)– Biggert Waters (BW) New & Lapsed

• Retro on 7/6/2012• Lapse on 10/4/2012

– HO Affordability Act 2014 (HAA)• Effective immediately (4/15/2104) all business processed after

5/1/2014 can use subsidized rates

• POST-FIRM– Constructed or Substantially Improved after the FIRM– Should be constructed based upon the map in affect at

the time of construction

Community CodePost-FIRM Date Current Flood Map

Freeport 360464 2/14/1976 9/11/2009

Lynbrook 360478 4/2/1997 9/11/2009

Garden City 361631 4/02/1997 9/11/2009

Glen Cove 360465 3/1/1978 9/11/2009Great Neck Village 361519

11/17/1982 9/11/2009

Massapequa 360480 1/19/1983 9/11/2009

Mineola 36152810/31/200

7 9/11/2009

Northport 360801 4/18/1983 9/25/2009

http://www.fema.gov/cis/NJ.htmlhttp://www.fema.gov/cis/NJ.html

Advisory Base Flood ElevationsAdvisory Base Flood Elevationswww.region2coastal.com/sandy/abfe

• Dec 15, 2012 10 NJ Counties including :

• Atlantic, Bergen, Burlington, Cape May, Essex, Hudson, Middlesex, Ocean, Monmouth and Union Counties

• NY Counties Bronx, Kings, New York, Richmond, Queens & Westchester

• Visit Web-site to determine any changes in Flood Zone or BFE

• Communities must still adopt new maps and new BFEs

Rockaway, Queens

Two Year Preferred Risk Policy Eligibility ExtensionTwo Year Preferred Risk Policy Eligibility ExtensionFEMA Bulletin W-12054FEMA Bulletin W-12054

• Under the 2 year PRP Eligibility Extension, buildings newly map into a SFHA on or after 10/1/2008 became eligible effective 1/1/2011 for a two year extension.

• Currently this program has be extended until further notice for both renewals and new map revisions.

• Effective October 1, 2013 20% Increase

Photo Credit: Photo via Brian Thompson/ Lockerz

Damage From Hurricane Sandy in Seaside Heights, New Jersey: Casino Pier Roller Coaster

Types of FoundationsTypes of Foundations

Section A Building Diagrams – Section A Building Diagrams – 9 Types of Foundations9 Types of Foundations

• Non-Elevated Buildings (1a,1b,2,3,4 & 9)

– Slab (Diagrams 1A ,1B, 3)– Basement (2, 4)

• Elevated Building (5, 6, 7 & 8)

– Elevated No Enclosure (5)– Elevated with Enclosure (6) - Storage– Elevated with Enclosure (7) - Walkout– Elevated

• Crawlspace at Grade (8)• Crawlspace Below Grade (9)

Non-Elevated Buildings Non-Elevated Buildings

BasementBasement

• Any area of the building, including any sunken room or sunken portion of a room, having its floor below ground level (subgrade) on all

Below Grade CrawlspaceBelow Grade Crawlspacevs.vs.

Basement?Basement?

27

Building Diagrams 9 – Below Grade CrawlspaceBuilding Diagrams 9 – Below Grade Crawlspace

Sub-Grade Crawl Space – 2/5 RuleSub-Grade Crawl Space – 2/5 Rule•Within 2 feet below grade (LAG) on all sides

• 15.4 – 17.4 = -2•Within 5 feet from the top of the next higher floor

• 19.3 – 15.4 = +3.90•The elevation of the crawl space floor is below the Base Flood Elevation (BFE)

Sub-Grade Crawl SpaceSub-Grade Crawl Space• Within 2 feet below grade (LAG) on all sides

• Within 5 feet from the top of the next higher floor, and

• The elevation of the crawl space is below the Base Flood Elevation (BFE)

Sub-Grade Crawl Space Sub-Grade Crawl Space Or Or

Basement?Basement?

And the answer is…..

BasementBasement• Within 2 or more feet below grade (LAG) on all sides

• The next higher floor is more than 5 feet

• The elevation of the crawl space floor is below the Base Flood Elevation (BFE)

Elevated BuildingsElevated Buildings

EnclosuresEnclosures

• Portion of an elevated building below the lowest elevated floor that is either partially or fully shut in by rigid walls

Flooding in Red Hook, Brooklyn!!

Rating Hints

Proper Openings (A Zones Only)Proper Openings (A Zones Only)

• Minimum of two Openings• Opposite Walls• No Higher than 1 Ft above the higher

of the interior or exterior grade.• Sq inches of venting => than Sq Ft of

enclosure• Newer Elevation Certificates have

Venting Information• Older Elevation Certificates do not

venting information and the Agent needs to obtain

Obstruction (V Zones Only)Obstruction (V Zones Only)

• Obstruction– Any wall (1-4) may

constitute an obstruction whether it is on the ocean or beach side.

• LFE is the bottom of wall

– Any M&E below the base flood elevation

• LFE is M&E

– Breakaway Walls > 300 sq. feet or with M&E

• LFE is the bottom of the Breakaway Wall

Elevation Certificate (EC)Elevation Certificate (EC)• Tool Used to Determine

the Premium• Prepared by:

– Engineer– Architect– Land Surveyor

• Provides Elevations– Pre-FIRM in SFHA

• Optional New/renewals processed after 5/1/2014

– Post-FIRM in SFHA• Required

•

Elevation CertificateElevation Certificate

• Land Surveyor

• Engineer

• Architect

• Community Official authorized by Law or Ordinance to provide floodplain Mgmt Building elevation information

Section A: Property Section A: Property InformationInformation

Section B: FIRM Section B: FIRM

Section C: Elevation Section C: Elevation InformationInformation

Vertical DatumVertical Datum• Reference Point used to calculate elevations• Two Main Types

– NGV29 –Geodetic Vertical Datum of 1929– NAVD88 – North American V. Datum 1988

• More Accurate• Compare B.11 to C.2

Building PhotographsBuilding Photographs

Required Proper PhotosRequired Proper Photos

• Recently dated photos– Within 90 days

• 2 Photos for elevated buildings• 4 Photos for Split Level• More photos the better• Need to see:

– Number of floors– Enclosure (vents/breakaway)

Limited Coverage

Limited CoverageLimited Coverage

• Basements

• Post FIRM Elevated Building with Enclosure located in– Zone A, AO, A1–A30, AE, A99, AH, AR,

AR/A, AR/AE, AR/AH, AR/AO, AR/A1–A30, V1–V30, VE, or V

Limited CoverageLimited Coverage

Buildings constructed on a crawlspace at grade are considered elevated buildings. The enclosure is considered that area below the top of the crawlspace floor, including the attached garage.

 

Post FIRM enclosure limitation would apply to that area below the top of the crawlspace floor including the garage. Property located above the top of the crawlspace, including within the garage, would not have the limitations. See item 6 regarding elevators.

 

PRE-FIRM buildings, and/or buildings located in flood zones AO, AOB, un-numbered A or V zones, or A99 Flood zone would not have the limitations.

The enclosure is considered that area below the elevated floor including the garages. Post FIRM enclosure limitation would apply to that area below the elevated floor. See item 6 regarding elevators.

 

PRE-FIRM buildings or buildings located in flood zones AO, AOB, un-numbered A or V zones, or A99 Flood zone would not have the limitations.

Recent NFIP Events

Clean-up continues on Saturday, November 10 among piles of debris where a large section of the iconic boardwalk was washed away in the heavily damaged Rockaways

Pre-FIRM Non-Primary Residence/SFHAPre-FIRM Non-Primary Residence/SFHA• Effect 1/1/2013 estimated 25%

Rate Increase

• Next 25% rate increase 1/1/2014

• Non-Primary means building will not be lived in by insured and/or spouse 80% of 365 days

– On 6/1/2014 changes to 50%• Valid Driver’s Lic, Auto Reg, Proof of Auto

Ins, Voter’s Reg, Homestead Rebate, Documents showing where children attend school

• Elevation Certificate is Optional

Full Risk Rating – FRR ChangeFull Risk Rating – FRR Change• BW Pre-FIRM Building in SFHA

Rated using most current information

– BW New Purchases on/after 7/6/2012• First Effective Date after 10/1/2013• Includes Mid-Term Endorsements• Eliminated Grandfather Rule for New Business• Will not apply to gifts, transfers of ownership, or

assignments to an estate or trust in which a purchase did not take place.

– BW Lapse• On/After 10/4/2012• After 30 day Waiting Period

– HO Affordability Act 2014 (HAA)• Effective immediately (4/15/2104) all

business processed after 5/1/2014 can use subsidized rates

This aerial photo shows destruction in the wake of superstorm Sandy on Wednesday, Oct. 31, 2012, in Seaside Heights, N.J. (AP Photo/Mike Groll)

Pre-FIRM Business located in SFHAPre-FIRM Business located in SFHA• Effect 10/1/2013 estimated 25%

Rate Increase– Next 25% rate increase 10/1/2014– Optional Elevation Certificate

• A Business Property produces income or designed as an office, retail space, or for wholesale, hospitality or similar uses.

• Buildings permitted for residential use such as apartments, rentals, churches are not considered business properties.

• Rulemaking process still need to provide addition clarification.

Severe Repetitive Loss Properties (SRL) Consisting of 1-4 Family &Properties damage claim payments => Fair Market Value of Property

• Effect 10/1/2013 estimated 25% Rate Increase

– Next 25% rate increase 10/1/2014– Optional Elevation Certificate

• SRL consists of any NFIP-insured residential property that has met at least 1 of the following paid flood loss:

– criteria since 1978, regardless of ownership:

– ••4 or more separate claim payments of more than, $5,000 each (including building and contents payments); or

– •• 2 or more separate claim payments (building payments only) where the total of the payments exceeds the current value of the property.

– In either case, 2 of the claim payments must have occurred within 10 years of each other.

Michael Mimmo of Bayville, N.Y., kayaked through his neighborhoodMichael Nagle for The New York Times

October 2013 ChangesOctober 2013 Changes• Reserve Fund effect 10/1/2013

– 5% Reserve Fund based upon total premium

• HOAA - $25 Primary/$250 All Others

– Future claims, claim adjustment expenses and other NFIP Obligations

– Not PRP

• Elimination of No Waiting Period Due to Lender Requirement

– After Loan is Made - The 30-day waiting period applies to a new application when the lender determines that a loan for a building in an SFHA requires flood insurance does not have it.

• Various rate increases based upon flood zone.

• Increase of Policy Fee– Standard $40 to $44– PRP $20 to $22

Marine Max and River Rock parking lot Credit: Ilana Kelly

Union Beach, N.J., March 7, 2013 -- In Union Beach, new framing is in place on a home that is being elevated after having been damaged by Hurricane Sandy in late October. Hazard mitigation information relating to rebuilding after Hurricane Sandyby Sharon Karr/FEMA

Other Changes that affects LendersOther Changes that affects Lenders• Increase Penalty

– Increase maximum civil money penalty for an FDPA violation to $2,000

– Elimination of the annual penalty

• Private Insurance– Lenders accept private flood insurance

policies if the coverage satisfies the standards specified in the Act.

• RESPA Change– Lenders disclose to borrowers certain

information regarding the NFIP– Flood Ins available in NSFHA

• Elimination of No Waiting Period Due to Lender Requirement

– After Loan is Made - The 30-day waiting period

June 2014 ChangesJune 2014 Changes• Other Residential

– Increase Building $500K

• Min. Deductible – Pre-FIRM

• < $100K or Less/$1,500• > $100K/$2,000

– Post-FIRM • <$100K or Less/$1,000• >$100K/$1,250

• Policy Disclosure– English/Larger Text

• Dec Page to Reflect– Pre-FIRM– Primary Residence

Big Changes Coming in the aftermath of Hurricane Sandy.

Homeowners Flood Insurance Affordability Act (HAA)Homeowners Flood Insurance Affordability Act (HAA)

• President to Sign HR 3370

• Industry Experts believe it will take FEMA 12-18 months to implement

• HOF Provisions– Reinstates Grandfathering– Repeals Homebuyers full-

risk rate of Pre-FIRM at time of purchase and voluntary

– FEMA to consider various flood mitigation when estimating rates

A flooded street between two casinos along the Boardwalk before the arrival of Hurricane Sandy October 29, 2012 in Atlantic City, NJ. AFP PHOTO/Stan HONDASTAN HONDA/AFP/Getty Images / AFP/Getty Images

HAA – Phase 1 Bulletin W-14014HAA – Phase 1 Bulletin W-14014

• Stops FRR– Pre-FIRM New, Lapse,

Renewals– Use 10/1/2013 Subsidize

Rates– Business received or

processed after 5/1/2014

• WYO to refund in excess of Pre-FIRM subsidized rates– FEMA still needs to

implement process– Mid-Term Endorsement not

allowed to generate refund

HAA - HighlightsHAA - Highlights

• HAA Provisions:– Requires FEMA to issue

guideline for alternative mitigation other than building elevations

– FEMA refunds homeowners for overpaid

• Senate bill for only primary

– Annual Surcharge• $25 Primary HO• $250 per Commercial/Non-Primary

– Higher Deductible for Residential

• $10,000

– Annual & Monthly Payment – Cap on Rate Increase

• 15% Avg. Class• 18% Individual Properties

HAA - HighlightsHAA - Highlights

• HAA Provisions:– Flood Insurance Advocate to

answer mapping process and flood rates

– Requires FEMA to make rates and guideline available to public

– Nonbinding goal to minimize policies with annual premiums that exceed 1% of the total coverage

– FEMA to certify in writing to Congress technically credible flood hazard data in all areas where flood maps are used

– Allows FEMA to use reserve fund to reimburse policyholders and communities for successful map appeals.

11 $250,000 Building/$100,000 Contents with $1,000 DeductibleZone/Foundation Premium

B,C or X - PRP/Slab or Elevated $414 489 PRP EEB,C or X - PRP/Basement $460 524 PRP EE

B,C or X - STD Slab/Elevated No Enclosure $1,958Primary & Secondary

B,C or X - STD Basement $2,386 Primary & SecondaryB,C or X - STD Elv W Enclosure $2,520 Primary & Secondary

* 1-4 Family Home/ October 2013 Rates. This is just an estimate as Premium can be impacted by value of M&E, CRS Discounts, Elevators etc

11 $250,000 Building/$100,000 Contents with $1,000 DeductibleZone/Foundation PremiumA Zone - Slab or Elevated $3,950 Primary SubsidizedA Zone – Basement $4,614 Primary Subsidized

A Zone - Slab or Elevated $5,015 SecondaryA Zone - Basement $5,827 Secondary

A Zone Post FIRM Post

SFR – Rates manually calculated Slab/Elv No Basment With Enclosure

0 $1,427 $1091 $1,0911 $781 $712 $712

2 $610 $604 $604

3 $560 $572 $572

4 $553 $553 $553-1- $4,150 $2,610 SFR-2 $5,535 $2,836 SFR-3 $6,096 $3,030 SFR-4 $7,646 $3,734 SFR

* 1-4 Family Home/ October 2013 Rates. This is just an estimate as Premium can be impacted by value of M&E, CRS Discounts, Elevators etc

$250,000 Building/$100,000 Contents with $1,000 DeductibleZone/Foundation PremiumV Zone - Slab or Elevated No Encl. $8,478Primary SubsidizedV Zone – Basement $10,178 Primary

V Zone - Slab or Elevated No Encl. $10,992 Secondary SubsidizedV Zone - Basement $13,181Secondary

V Zone Post FIRM Post Pre

SFR – Rates manually calculated Elevated No Obstruction Elevated No Obstruction

4 $5,428 $4,8783 $6,196 $4,878

2 $8,459 $4,878

1 $11,257 $4,878

0 $14,411 $4,878-1- $19,215 SFR-2 $25,567 SFR-3 $28,948 SFR

Post 81 w Est Repl. Value $800K

* 1-4 Family Home/ October 2013 Rates. Estimate Premium can be impacted by value of M&E, CRS, Elevator etc…..