Forum Offers Step Toward Clarifying Flood Insurance Overhaul

In December 2012, Christopher J. and Karen M. Greer bought a home on Academy Drive in Buzzards Bay. The couple had spent the previous 12 years living in Killingly, Connecticut, but decided to move back to Massachusetts, where they had each grown up. The couple knew that they were buying a house that was in a flood zone and budgeted roughly $4,400 a year for flood insurance. However, they purchased their home after passage of the Biggert-Waters Flood Insurance Reform Act of 2012.

A year after moving into their new home, the Greers received an invoice from their insurance company to the tune of $44,000 for flood insurance for the coming year; the escalated rate a direct result of Congress passing Biggert-Waters.

“Shock and disbelief,” Ms. Greer said, describing her reaction to seeing the invoice. She said that her insurance agent had warned the couple that there could be an increase in their flood insurance rates, but not a 1,000 percent jump.

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“We were scared. It’s a crummy feeling, thinking to ourselves ‘we can’t pay this. Are we going to lose our home?’ ” she said.

Ms. Greer said that while she and her husband have not paid the $44,000 premium, they still have flood insurance. She said that because they are part of the National Flood Insurance Program, the bank is required by the federal government to “force-place flood insurance” on their property. To do so, the bank adds an additional $820 a month on the Greers’ mortgage; more than the $4,400 a year they initially paid on their premium, but substantially less than the $44,000 they were invoiced.

The couple also contacted the office of US Representative William R. Keating, who was one of the leaders of an effort to repeal, in whole or in part, Biggert-Waters. As a result of that effort, several months ago the US House of Representatives passed the Homeowner Flood Insurance Affordability Act. The measure is designed to provide relief to homeowners from the skyrocketing rates imposed by Biggert-Waters. The legislation was passed by the US Senate last Thursday, and President Obama is expected to sign it into law this week.

“It sounds like positive changes are coming, so we’re excited about that,” Ms. Greer said.

Ms. Greer was one of approximately 100 people who filled the lobby of the Bourne Veteran’s Memorial Community Center on Saturday morning for a forum on the Homeowner Flood Insurance Affordability Act. Sponsored by the Bourne Democratic Committee, the forum featured presentations by James M. Quigley, deputy district director for Rep. Keating, and town engineering technician Dody Adkins-Perry. Ms. Adkins-Perry made it clear to the audience that she was speaking to them not as a town official, but as a resident of Bourne.

Ms. Adkins-Perry explained that Biggert-Waters required that all properties be charged full insurance market-rate premiums. It was also set to end all discounts and all grandfathering within five years. The legislation grew out of a series of major storms throughout the first decade of the 2000s that left the National Flood Insurance Program with an $18 billion deficit. Tropical Storm Sandy in October 2012, the second costliest storm in US history, added to that deficit, she said.

She told the audience that at the demand of Congress, the Federal Emergency Management Agency created new flood zone maps for all developed coastal communities nationwide. She pointed out that the new maps, and zoning language specifically required by FEMA, have to be approved at Town Meeting. There are consequences if the maps are not adopted, she said. Bourne residents will not be able to buy federal flood insurance at any price and without flood insurance, no one in a flood zone will be able to get or keep a mortgage. Also, if a flood disaster is declared, residents, as well as the town, would not be eligible for federal disaster relief benefits.

In Bourne, nearly 300 structures are going into a high risk flood zone for the first time, and about half that number will be moved up from the high risk AE zone into the higher risk VE, or velocity, zone. In addition, about 1,500 homes are facing a rise in base flood elevation; that is the projected level of flooding due to storm surge.

Under the new law, grandfathering will be restored for homes that complied with base flood standards at the time they were built, she said.

The affordability act also caps the rate of premium rise at 18 percent per year, whereas previously under Biggert-Waters, there was no cap, Ms. Adkins-Perry said. She said that FEMA had expected rates to increase about 20 percent, but some residents had been invoiced as much as 100, 200 and 300 percent. She said that without passage of the new law people would have lost their homes, the real estate market would have tanked and with it, the town’s tax base.

“It was a lose-lose-lose proposition, so I personally am thrilled that the flood insurance affordability legislation is about to be signed into law,” she said.

Mr. Quigley explained that under the provisions of the new measure, properties with grandfathered flood insurance rates under the National Flood Insurance Program would not have those rates repealed, as required under Biggert-Waters.

“If you are mapped into a new zone or a higher rate zone, you won’t see a substantial increase based on that new zone; you will get to keep your rates according to your grandfathered status,” he said. He noted that the provision applies not only to primary homeowners, but for owners of second homes and businesses.

Mr. Quigley also assured the audience that, under the new flood insurance affordability act, anyone that had already paid excess charges because of Biggert-Waters will be refunded.

Mr. Quigley criticized a recent article in the Boston Globe as inaccurately suggesting that the new affordability act is just a bailout for the wealthy, or people with second homes on the beach.

“We have many people…living in very modest homes. That’s why this affordability component is important, so we don’t see overpriced premiums going forward,” he said
Mr. Quigley noted that while the new legislation is moving flood insurance reform in the right direction, it does not provide as much relief as Rep. Keating and other sponsors of the bill would have liked.

“But that’s part of what happens when you create a law. This was a compromise bill on the part of Democrats and Republicans to get something done,” he said.

Marilyn J. Crane of Gray Gables said that she does not carry flood insurance now, but she will need to purchase insurance since the new maps place her in a flood zone. She asked if the new law protects her from exorbitant insurance premiums.

Mr. Quigley said that given the age of her home, 60 years, she should be protected under the bill’s grandfathering provision.

Ms. Crane said that the new flood maps affect a lot of people in Gray Gables who will suddenly be required to get flood insurance in order to keep their mortgages. Uncertainty as to whether all homes are protected by the new legislation from escalating premiums could also make selling a home difficult, she said.

Ms. Adkins-Perry tried to alleviate her anxiety. She said that Biggert-Waters has left people bewildered over the past year and a half. The new legislation will provide homeowners with solid answers to their questions.

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