X Marks The Spot
New flood maps will be issued as early as June 1st for Rockaway and Broad Channel. “Advisory” maps produced some months ago reveal that Rockaway and Broad Channel will be placed in high risk zones which come with very costly premiums. FEMA designates these zones as “A” and “V” and are part of what FEMA calls a Special Flood Hazard Area.
These new maps are still “advisory” in nature and subject to modification through challenges in an appeal process. FEMA says it will be between 18-24 months before maps and zones will become official and higher rates kick in.
Although FEMA indicates there will be just two zones in future maps (A and V), there are currently a variety of zones in Rockaway and Broad Channel.
One of those zones — the X zone — is apparently a very valuable designation. The X Zone means “low risk” and homeowners can qualify for a “preferred risk policy.” Being in this zone might mean saving many thousands of dollars.
Initial reports from FEMA and repeated by Housing Recovery Office officials said the benefits of the X zone would be limited.
The Wave asked FEMA on several occasions if X zone rates could be grandfathered but was told the X zone’s grandfathering was limited to the current owner and not transferrable. Now, in a reversal FEMA said the X zone policies can be passed on to a buyer.
This is a dramatic turnabout. By locking into an X zone policy and being allowed to transfer the policy upon a sale, X zone homeowners will not have to face crushing insurance premiums and possibly have an important selling chip to offer buyers. The X zone homeowners will likely not have to face the unenviable choice of paying more than $10,000 per year in insurance premiums or elevating their homes. They can retain all the benefits of being in a “low-risk area,” which is how the X zone is described.
X Zone policies are available throughout Rockaway and parts of Broad Channel – which will soon be moved to a V Zone, the costliest zone.
There is uncertainty about eventual rate hikes (the rate now is approximately $450 per year) and while the X zone is now under “preferred risk” and might be moved to “regular X” there is no doubt that being in this zone is far better than “A” or “V.”
ALL X zone homeowners AND businesses should consider purchasing polices before the new flood maps are approved (within 18-24 months) — even if you don’t need flood insurance because you don’t have a mortgage. At some point, you or your heirs will want to sell the house and having an X zone policy could mean a very substantial difference in a sale. The opportunity to keep the X zone designation will end unless a policy is purchased before the new maps are accepted.
Go to this website. http://www.region2coastal.com/sandy/table Put in your address and you’ll find your current zone (you must scroll down past the advisory zone). The last line usually reveals your current zone. Sometimes you may find “N/A.” If that occurs, go to Google and type in “what is my flood zone.” You should be able to find sites that will provide you with the information (one example: freeflood.net).
In the recent Wave editorial reporting on flood insurance the paper relayed information screened and approved by FEMA officials, one of whom was called an “expert” by her peers. FEMA said X zone policies would not be available to a new buyer. The Wave relied on their expert and reported that. More than a week later, a Wave reader alerted us that his insurance agent said the X was, in fact, able to be transferred. We went back to FEMA and their retreat began.
After numerous emails to FEMA, it was suggested we “google” some of our questions – and so we did.
Of course, a web search can lead anywhere. The first place we found a different explanation was on various county websites from states in the southeast. Websites in South Carolina and Georgia plainly said in regards to X zone policies: To help maintain this grandfathering benefit for the next owner, you may transfer the policy to them at the time of sale.
We googled further and came upon websites run by FEMA itself including floodsmart.gov and Region3Coastal.com. It so happens the language used by counties in southeastern U.S. states comes from FEMA:
An insurance agent will rate your flood insurance policy based on the flood map that is in effect on the date you purchase your policy. Flood insurance policies may then be renewed and still be rated based on the flood map in effect when the policy was initially rated as long as the flood insurance coverage is continuous and the building has not been altered in a manner that would remove this benefit. For example, if the building on the property is currently mapped in an X zone, you could purchase the policy before the flood maps are adopted and keep the lower rate associated with the X zone even after the new flood maps become effective. To help maintain this grandfathering benefit for the next owner, you may transfer the policy to them at the time of sale.
Diana Kidder, the FEMA person called an expert by several colleagues, said she passed the information The Wave had gathered on to “headquarters.” The response from headquarters? “We prefer to use the word ‘assign,’ not transfer.”
That puzzling response prompted The Wave to ask “headquarters” to respond to FEMA websites that explicitly use the word “transfer” and the clause to help maintain this grandfathering benefit for the next owner, you may transfer the policy to them at the time of sale.
We await their response.
Clearly, the fuzzy language and uncertainty is a FEMA problem (and of course, a problem for all of us). A lot of this uncertainty comes from the language in the Biggert-Waters Act, part of a 584 page Transportation bill. The flood insurance part of the Act is buried deep, not appearing until page 512.
The Biggert-Waters Act seeks to remove subsidies from flood policies but there is no mention of “A zone” and “V Zones” or “X Zones at all. Although we have reason to doubt FEMA’s expert information, it was revealed this week that “A” and “V” are the only federally regulated zones (that get subsidies). X is a low-risk zone not subject to the Biggert Waters legislation.
The confusion caused by Biggert- Waters is a clear indication that our legislators (Schumer, Gillibrand, and Meeks) must revisit the law and take steps to rectify these matters.
Although there is apparent good news (based on the words printed on FEMA’s websites and seemingly confirmed by FEMA officials) for X zone homeowners, properties in two Zones (A and V) will be subject to the drastic premiums reported in recent weeks.
The Wave used $9500 and $10,000 as A zone examples of what premiums will cost if your house is 4 feet below the elevations FEMA establishes. If you have a basement and are more likely to be at 10 feet below there are insurance websites that calculate your annual premium will be $16,650 per year. The V Zone annual premium can run as high as $30,000 per year.
The above examples should provide current X Zone homeowners all the incentive they need to lock in their policies now and benefit from the grandfathering allowed.
The X Zone policies are not available to everyone, by a long shot. Many homes and businesses are already in A zones and face premiums that will be too much to bear.
FEMA is not clear but this much is: The language of Biggert-Waters needs clarification; the implications need understanding.
If FEMA experts are getting it wrong and their “headquarters” are issuing statements about how they “prefer ‘assign’ instead of “transfer” it’s time to question much of what is before us.
At the recent Community Board meeting Dan Mundy Jr., President of the Broad Channel Civic Association, called into question the science and accuracy of the new flood maps and zones and the manner in which they were determined. The same challenge has been issued by STOP FEMA NOW, a New Jersey based group.
Well, The Wave has been given reason to doubt FEMA experts.
After contacting Senators Schumer and Gillibrand for comment we received the following statements.
“Senator Schumer will fight every step of the way on this long process to make sure any proposed maps are accurate, based on the best available science and that insurance policies are affordable. In addition, the Senator led the successful effort to secure billions in Sandy relief funding that will be used to help homeowners make protective improvements to lower flood premiums — and to repair their homes — as well as funding vital shorefront flood mitigation projects and boardwalk rebuilding.” From Senator Gillibrand:
“It is difficult to understand the magnitude of the devastation in the Rockaways without seeing it firsthand. In hearing after hearing, I have been retelling the story of what I saw firsthand in the Rockaways to my colleagues in Washington and fought hard to pass emergency funding that will finally begin flowing into the hands of those who desperately need it. The CDBG grants are an important step in helping Rockaway families recover and rebuild. But there are a lot more challenges we need to overcome in the weeks and months ahead.”
At the recent Community Board meeting a FEMA official said that Army Corps of Engineer work, such as a sea wall could change the flood elevation requirements thereby reducing insurance costs and/or removing the need to elevate houses. Such work is not yet planned.
If you remain concerned here are phone numbers of your representatives:
Schumer: 212 486-4430; Gillibrand: 212-688-6262; Meeks: 347-230-4032.