There are several ways to lower your flood insurance premium, but for real savings, you either have to pay off your mortgage and “go bare,” or move your house out of, or above, harm’s way.
Elevating a low-lying house above the base-flood elevation is a smart thing to do (see story on this page), but it is expensive.
Fortunately, help is available — from FEMA, the very organization that most people blame for either their home’s placement in a flood zone, or the expense of their insurance premiums.
Every year, the Federal Emergency Management Agency funds grant programs in FEMA’s nine regions, said Des Companion, Community Rating System coordinator for Sarasota County.
Florida is in Region 4. The Community Rating System offers premium discounts to policyholders in communities that participate in the National Flood Insurance Program and adhere to FEMA’s flood-control standards. Sarasota County’s flood control is good enough to earn its insured residents up to a 25 percent CRS discount.
“Typically the grants are 75 percent paid by FEMA, 25 percent by the homeowner,” said Companion. “Last year, they did 90 percent and 10 percent.”
FEMA sometimes pays the entire cost of elevating a house, she said. “In the past, it has been targeted toward ‘severe’ repetitive-loss homes, repetitive-loss homes, and those that are a known flood risk, even though . . . there is no tracking mechanism.”
Annually, because Sarasota does the CRS program, “I reach out to potential flooding neighborhoods with a talk at the library about what is going to be available that year.
“Many times I coordinate that with the City of Sarasota, the town of Longboat Key and others.”
FEMA has not announced its grants yet for 2014. “It is competitive,” said Companion. “Sometimes you have to have a really good project that gets points, and the state says, ‘We like these five, we will put them in.’ They will be entered into FEMA Region 4.”
Seeking and accepting a FEMA grant, says Companion, is a personal decision.
“A homeowner would have to want to participate in the application process,” she said.
“One of the new rules is, if you apply and receive an award, which could take five years or more, and then refuse it, then you could be subject to full actuarial rates.”
She admits that might be a deterrent to seeking a grant.
“Say you have a heart attack in two years? It is really hard to make that decision.”
The grant goes with the structure, not the owner.
“I have had someone apply, and a couple of years later got the award and put the house up for sale. The grant award can go to the new owner. And they can choose if they want to accept it.” In that case, if the new owner decided not to elevate, he would not be subject to full actuarial insurance rates, she said.
Companion said elevating houses is not all that unusual. It is done “all the time, gradually,” after flood events.
“What it comes down to for residents is an affordability issue. If they are able to afford a high insurance premium, and they want to stay there forever, they are OK,” she said.
“If they can’t afford a high insurance premium, then they are looking at alternatives to improve the value of their home and stay in their home affordably. That is the reason people express to me for looking at mitigation ideas.”
The best mitigation methods, she said, are site-specific. “Does the house have new windows and roof? Is it a value to elevate it? It is like a benefit-cost analysis,” said Companion. “Is the charge per square foot (to elevate) more than the house is worth to you? That could be emotional worth or dollars-and-sense worth. The bottom line is what they find the value in.”
Companion’s goal is to educate homeowners about their properties’ risk of flooding. Often, she said, owners don’t know their homes are in high-risk flood areas.
And she wants people to be insured.
“We have had more than $25 million in FEMA flood claims — 1992 and other small events,” she said. “If you have insurance in place, communities recover much faster.”
