FEMA Officials Discuss Flood Insurance at Surf City Library

Some in Audience at Least Learn Where to Find Information
Apr 25, 2013
Photo by: Ryan Morrill

Many older people struggle with computers. It’s a fact. They simply were not indoctrinated into them, and it’s tough to catch on with modern technology. The majority of those inside a full conference room Monday evening, April 22, at the Long Beach Island branch of the Ocean County Library in Surf City, awaiting a discussion with Federal Emergency Management Agency officials, were senior citizens. Many found the answers they needed simply by being shown how to work a website set up to give the public accurate information in the wake of Superstorm Sandy.

That FEMA website is region2coastal.com. A number of participants sang its praises. Mary Jane Carrino of Beach Haven West was very pleased with the site. She was at the library on behalf of a neighbor, currently displaced to North Jersey, who is unsure what she will have to do with her house, condemned because of flood damage.

“They were very helpful. And I was surprised how much information the website gives that a lot of people really need to know,” said Carrino.

It wasn’t all one fun computer lesson on Monday, however, as that portion of the meeting followed a question and answer session fwith a panel featuring officials from FEMA and the Small Business Administration. Several pertinent issues were brought to light.

The meeting opened with library Branch Manager Linda Feaster introducing the panel and thanking Gov. Chris Christie for making it possible. Feaster had set 25 seats aside for Island mayors, members of governing bodies, and public officials, all of whom were invited to attend. Surf City Councilman Pete Hartney was there, but no one else was able to make it.

Kenneth Spedding of Tuckerton, a floodplain management specialist for 22 years, called himself a “local hire” following Superstorm Sandy. Spedding encouraged those in attendance to work with their local municipalities for permits or flood elevation certificates, and he stressed the importance of finding who their municipality’s floodplain administrator is; it is most often the town construction officer.

Mark Jamison, a public affairs specialist with the Small Business Administration, encouraged those in attendance to apply for SBA loans in regard to Sandy damage by a quickly approaching May 1 deadline. The low-interest loans can net someone up to $200,000 for property damage and up to $40,000 for contents lost during Sandy. He remarked that applications are also still accepted for FEMA’s Other Needs Assistance. Later, in an interview with The SandPaper, he explained that SBA loans were used following Hurricane Katrina to supplement flood insurance claim payments.

Jeff Woodward, a FEMA insurance specialist with the Floodplain Management Program, said everyone in the room should have had his or her flood insurance claim adjusted by now. He also noted that by October, all National Flood Insurance Program policies will become elevation rated, and stressed that the Biggert-Waters Flood Insurance Act of 2012 is going to have a large impact on residents who are required to elevate their homes but don’t.

The Biggert-Waters Act states flood insurance subsidies will be eliminated for “any residential property that is not the primary residence of an individual.” Those subsidies have allowed up to a 40 percent reduction in flood insurance premiums; without them, yet another expense is added to those hit hard by Sandy.

Woodward confirmed that subsidies could be eliminated also to primary home residents if significant damage resulted in the need to tear a home down and rebuild.

During a question and answer period, a member of the audience asked about legislation proposed by Congressmen Frank LoBiondo and John Runyan that would reduce the upcoming rate increases from 25 percent a year to 12.5 percent a year. Woodward was unsure about the progress of the bill, but remarked, “We’re talking about Congress here.”

Patrick Holloway, a FEMA staff member who helped design the region2coastal.com website, said revised FEMA flood zone maps that were disclosed in December were conservative. “Any changes will only be to your advantage,” he said, referring to FEMA flood zone map changes expected by summer’s end.

Holloway said a house 1 or 2 feet above the updated Advisory Base Flood Elevation would net a homeowner a reduction in flood insurance premiums. Also, he said if a home is on a borderline between a V-zone (the most costly for flood insurance) and an A-zone, that home would be placed in the A-zone.

Holloway would not confirm to The SandPaper that this would mean a definite reduction in the number of homes placed in V-zones (wave velocity zones) by FEMA. He said that all depends on data accumulated since changes were last made. He explained that the velocity zone is defined as a location that not only can be flooded but where waves can strike the property. Those disagreeing with their home’s post-Sandy placement in a V-zone will have a 90-day appeal period following this summer’s anticipated revisions, to present scientific data as to why his or her home should not be in a V-zone.

In regard to beach replenishment, Holloway said he was in a meeting last week that confirmed data, and information is being shared between the NFIP and U.S. Army Corps of Engineers that suggests having a federal beach replenishment project in a given municipality could lead to a reduction in flood insurance premiums.

Another audience member asked what retirees could do if their fixed income could not afford a large increase in flood insurance premiums. Woodward said a study on insurance affordability is coming soon.

Woodward later said only 45 percent of those who should have NFIP flood insurance policies actually do – most likely because properties without a mortgage are not required to have a flood policy. The point was proven when half the audience raised their hands when asked if their homes were built pre-1960, before the NFIP and flood insurance in America even existed.

He said if the NFIP had 100 percent compliance, they would see more than a $5 billion a year surplus, rather than having to resort to continually borrowing money from the U.S. Treasury and putting itself further into debt. Woodward stressed the need to raise the compliance of those who should have flood insurance up from that 45th percentile.

In regard to the outlook for future storms, Woodward said that due to rising sea level temperature, an increase in large storms reaching farther north is expected; a Category 3 hurricane reaching as far north as New Jersey is not out of the realm of possibilities.

When asked by a member of the crowd what he would get for having to pay an increased flood insurance premium, Woodward responded only with “a lighter wallet.”

Speaking with The SandPaper following the meeting, Woodward was his most candid in describing the NFIP’s difficult financial state, which many of the provisions of the Biggert-Waters Act are meant to eventually alleviate.

“No, we’re not broke. As long as the U.S. Treasury has money in it, we’re not broke.”

In regard to reports from many residents who claim they received less money in their closed claim payment than is needed to repair their home from Sandy damage, Woodward said most problems occur due to miscommunication. As a former insurance agent, he admitted that there could be incompetence among a company’s adjusters. Yet he defended the industry as a whole, saying that no insurance company would have agents or adjusters with gross incompetence.

He denied that there has been any directive or agreement between the NFIP and its Write Your Own Program companies that sell its federal flood insurance policies to try to keep closed claim payments as low as possible, so as to borrow less money from the U.S. Treasury. FEMA officials confirmed previously that there is nothing within the WYO program that would give insurance companies incentive to make smaller closed claim payments.

“What do we care? We would just borrow more money,” said Woodward.

He refers to the NFIP borrowing $20 billion from the U.S. Treasury in 2005 after Hurricane Katrina bankrupted the NFIP. He said that $20 billion has all gone to closed claim payments in subsequent storms, as have all premium payments collected.

The NFIP remains $17 billion in debt. On Jan. 4, Congress passed legislation to increase the NFIP’s borrowing authority from $20.7 billion to $30.4 billion. Since then, it has borrowed more to deal with Sandy claims.

— Michael Molinaro


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