May 14th, 2013
posted by Paul Rega, MD, FACEP May 14, 2013 @ 12:06 am
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May 10, 2013
Rebuilding After Sandy, but With Costly New Rules
By TARA SIEGEL BERNARD
“It’s been more than six months since Hurricane Sandy hit the East Coast, yet many people whose homes were ravaged by the storm still do not know how to put all the pieces back together.
By now, most know how much insurance money they have to work with, though plenty of people are still struggling to get more. But a new federal law that happened to coincide with the arrival of the storm will cause flood insurance premiums to skyrocket and require stricter, and thus more expensive, rebuilding standards.
So in the most devastated communities, families are being forced to make difficult financial calculations: can they afford the new flood insurance premiums, which, at worst, can reach as high as $30,000 a year? Do they have the money to rebuild their homes to the government’s new specifications? Does it even pay to stay?
Some families have already thrown up their hands and put their houses up for sale, while others talk of making the best of really bad options…………”
Flood Insurance Reform Act of 2012
In 2012, the U.S. Congress passed the Flood Insurance Reform Act of 2012 which calls on the Federal Emergency Management Agency (FEMA), and other agencies, to make a number of changes to the way the NFIP is run. As the law is implemented, some of these changes have already occurred, and others will be implemented in the coming months. Key provisions of the legislation will require the NFIP to raise rates to reflect true flood risk, make the program more financially stable, and change how Flood Insurance Rate Map (FIRM) updates impact policyholders. The changes will mean premium rate increases for some – but not all — policyholders over time.
Impact of Changes to the National Flood Insurance Program (NFIP) from Section 205
Brochures and Fact Sheets
WYO Company Bulletins related to the Flood Insurance Reform Act of 2012
September 4, 2012, 10:30 am
Do You Have a Hurricane Deductible?
By ANN CARRNS
“……Details vary from state to state, and from insurer to insurer. But generally, when a hurricane (or, in some cases, a named storm) is declared by the National Weather Service, special hurricane deductibles apply for resulting damage. Such deductibles are generally a percentage of the home’s insured value, and usually run from 1 to 5 percent. So, for instance, if a home is valued at $300,000, the deductible could be as high as $15,000……”
Understand Your Flood Risk: Know That Sewer Back Up Insurance
Is Not The Same As Flood Insurance
Release Date: November 4, 2010
Release Number: 1933-047
NEW BERLIN, Wis. — Flooding is the most common and costliest natural disaster in the United States each year. The Federal Emergency Management Agency (FEMA) wants Wisconsin residents to understand their flood risk and learn more about the types of insurance coverage that are available to protect against flooding.
Some homeowner insurance policies do not cover flood damages.
Homeowners, business owners and renters in communities that participate in the National Flood Insurance Program (NFIP) can purchase policies or riders to protect property and contents. Policies average about $570 a year and can start as low as $119.
Special Flood Hazard Areas
Homeowners within a Special Flood Hazard Area have a 26 percent chance of experiencing flood damage over the course of a 30-year mortgage. Those individuals are required to purchase insurance for the life of the mortgage if the mortgage is funded through an FDIC-insured federally-regulated lender. But flooding can occur anywhere; insurance should be considered even in lower-risk areas, where preferred risk policies are available at lower premiums.
Sewer backup insurance
Sewer back up insurance may be necessary to cover damages that occurred where no surface water flooding also occurred. Sewer backup insurance, coverage for damages caused by backup through sewer and drains, is available on most homeowners and commercial policies, usually as an additional rider. There is a limit on coverage and a separate deductible. Sewer backup insurance may or may not also cover damage due to sump pump failure or power interruption, and does not cover damage from surface water or foundation seepage. Average policy coverage of $5,000-$10,000 costs $75-$150 per year. Sewer backup insurance may not be available in high risk flood hazard areas.
To learn whether they require flood insurance, individuals may contact a local insurance agent. To learn more about flood insurance, visit: www.FloodSmart.gov or call 1-800-427-2419.
FEMA’s mission is to support our citizens and first responders to ensure that as a nation we work together to build, sustain, and improve our capability to prepare for, protect against, respond to, recover from, and mitigate all hazards.