Flood Presentation

1. Flood Presentation

2. Who We Are • Mission Statement: Allow the citizens of Marshfield to have an active voice in coastal issues in town and regionally, along with keeping Marshfield citizens informed on coastal issues that affect them.

3. What is going on? 3Separate things happening at the same time: • Biggert – Waters (BW 12) • Homeowner Flood Insurance Affordability Act (HFIAA) • New FEMA Flood Maps

4. First things first: Understand the acronyms: Please reference the acronym sheet attached in your packet

5. NFIP

6. Explanation of Flood Zones • What are they? • V, A and X zones, as referenced on the FIRM’s (Flood Insurance Rate Map) • There are variations of V and A zones, (such as VE and AE) but for this presentation, we will use the basic V, A and X zones.

7. PART ONE • Legislation (BW 12 and HFIAA) Background: In 1968, Congress created the National Flood Insurance Program (NFIP). Since most homeowners' insurance policies did not cover flood, property owners who experienced a flood often found themselves financially devastated and unable to rebuild. The NFIP was formed to fill that gap and was designed to incorporate community adoption of minimum standards for new construction and development to minimize future risk of flood damage. After 45 years, flood risks continue and the costs and consequences of flooding are increasing dramatically. In 2012, Congress passed legislation to make the NFIP more sustainable and financially sound over the long term.

8. UPDATE Homeowners and citizens have already been successful in having a BW-12 amendment to eliminate some of the unintended consequences. That act is titled the Homeowner Flood Insurance Affordability Act (HFIAA)

9. NOTE: Going forward, all changes to BW-12 under HFIAA will be in red

10. Key Issues • Biggert Waters Act overview with amended legislation HFIAA • Who’s in, who’s out under both BW 12 andHFIAA

11. Keys to Legislation Changes • Elimination of some Pre FIRMrates • Reinstatement of Grandfatheredrates • Changes in primary residency and second homes • Changes to PRP • Elimination of certain BW 12 triggers to higher insurance cost

12. Pre FIRM • Remember, FIRM (Flood Insurance Rate Map) • There was a time communities did not have FIRM maps. Once they were adopted, houses that existed before they were adopted are called pre FIRM. • The Federal Government uses 1974 as the default Pre-FIRM date. Each community has their own

13. Grandfathering • What is Grandfathering? • Grandfathering are houses that are zoned into a new zone, but keep the old zone rates. For example, a house is in a V zone, but is paying an A zone rate.

14. These are known as Subsidized Rates • These 2 types of properties are known as Subsidized rate polices. They are NOTtaxpayer subsidized, rather they are subsidized by other flood policy holder. Bottom line of Legislation: Subsidized rates will CHANGE FOR SOME

15. NOTE • The following slides refer to structures ONLY in the current V and A zones (which is the SFHA: Special Flood Hazard Area) • Does not refer to current structures in X zones or the newly mapped area • Also only refers to structures with Federally backed mortgages (Most residential mortgages are federally backed including equity loans, etc)

16. What is Happening to Pre Firm and Grandfathered Structures ? • Non primary secondary residences (Pre-FIRM only): will see 25 percent increase annually until rates reflect full risk - began January 1, 2013. • Severe repetitive losses: will see 25 percent rate increase annually until rates reflect full risk - beginning October 1, 2013. • Business non-residential properties (Pre-FIRM only):Will see 25 percent rate increase annually until rates reflect full flood risk - beginning Oct. 1, 2013

17. What is the term “full risk”? • Full risk, also means Actuarial. This means non subsidized rates that are based upon FEMA rate tables. • FEMA also refers to this as “post FIRM” rates

18. What is the term “repetitive loss”? • Repetitive Loss: You have had 2 claims in 10 years over $1000 OR one loss exceeding 50% of the value of the structure • Severe Repetitive Loss: 4 losses of $5000 or more in 10 years OR Equaling or exceeding the value of the structure. • Also includes substantial improvement, which is work on a house equal to or over 50% of structure value at the time of improvement

19. Lets review one more time • Non primary secondary residences (Pre-FIRM only): will see 25 percent increase annually until rates reflect full risk - began January 1, 2013. • Severe repetitive losses: will see 25 percent rate increase annually until rates reflect full risk - beginning October 1, 2013. • Business non-residential properties (Pre-FIRM only):Will see 25 percent rate increase annually until rates reflect full flood risk - beginning Oct. 1, 2013

20. Primary Residences IF: • Property is sold • A new policy is purchased • The policy lapses • You suffer severe, repeated, flood losses • Substantial improvement or repair

21. If one of those things happen: • You IMMEDIATELY pay Actuarial cost, by losing grandfathered or Pre-FIRM status. Again, Actuarial means your actual flood risk (higher premium). Bottom line: your policy premium immediately jumps in price

22. What if I don’t have a Mortgage? • If you outright own your house, have no mortgage, equity loan, etc, and don’t plan to sell, this does not affect you HOWEVER. One of these: • Property is sold • A new policy is purchased • The policy lapses • You suffer severe, repeated, flood losses • Substantial improvement or repair Is bound to happen at some point in the structures life, and the new owner pays

23. So, what can I do? Get PRP Flood Insurance NOW!!! • Preferred Risk Policy, or PRP

24. Preferred Risk Policy • Refer to the Preferred Risk Policy hand out • CHANGES YOUR STATUS IN THE PROGRAM FOR THE GOOD: KEEP YOU GRANDFATHERED • So why do this now? LOCKS YOU IN AT LESS THAN $500 A YEAR AT MOST FOR LIFE OF POLICY • We will talk about this later

25. NEW LEGISLATION • The HFIAA Also: • Caps rate increases on individual policies at 18% so that no person’s rate may increase by more than 18% in a year. • Removes 5% increase for catastrophic fund, replaces with a fixed surcharge $25 per year on primary residence polices in the NFIP and $250 peryear on non-residential and non-primary residence policies • Requires FEMA to offer monthly installment payments for premiums and provides FEMA eighteen months to implement this requirement.

26. New Legislation • Bill H.R. 3370 does not address Pre-FIRMNON-PRIMARY RESIDENCE, Pre-FIRM BUSINESSES, SEVERE REPETATIVE LOSS and SUBSTATIAL DAMAGE (over 50% value) • BW-12 increases rates for these properties up to 25% year, for 4 years. This continues for these properties

27. PART 2 • Flood Map Changes • Background: Once a community is mapped and accepts Flood Insurance Rate Maps (FIRM) the community enters the NFIP. Every so often, FEMA updates these maps. This year, we are under going a MASSIVE change.

28. PART 2 • Flood Map Changes • Example • Blizzard of 78’ known 1 in 100 year storm (Documented by Army Corps of Engineers) • 1986 maps reflect a 1% difference from highest tides of 78’ storm • 2013 maps reflect 70% difference from highest tides of 78’ storm • 1986 maps reflect TRUE flood risk

29. Key Issues • How do I read these maps? • Am I in a new or changed flood zone? • If I am added or changed, what does this mean? • What will I pay and how is that determined?

30. Flood Zones • If you are in a V or A zone, as mentioned before, you are in the SFHA, Special Flood Hazard Area • In these zones, you MUST have flood insurance if you have a Federally backed mortgage, equity loan, etc.

31. Flood Zones • V zone: V stands for “velocity”, meaning you see wave action • VE zone: the “E” stands for Elevation. There is always an elevation given after the E. The elevation refers to the base flood elevation

32. Flood Zones • A zone: A simply means you are one step back from V • AE zone: the “E” stands for Elevation. There is always a number after the E. The elevation refers to the base flood elevation, or the max. height of water in a storm • AO zone: The “O” means water can rise up to 3 feet on a property • There are other “A” zones, but these are the basics

33. Flood Zones • X zone: X simply means you are one step back from A • X zone: You are NOT required to carry flood insurance, HOWEVER….. • 25% of flooding damage happens in X zones • There used to be B, C, and D zones, those have been eliminated

34. Graphic 1A

35. Graphic 1B

36. Graphic 1C

37. Graphic 1C Graphic 1D

38. How do I read this map? • The blue shaded area cover V and A zones (SFHA) • Whether you are in a VE or AE zone, the number after the “E” refers to the BFE (Base Flood Elevation) • Base Flood Elevation (BFE): ALWAYS the height of water in the 1% flood chance a year storm.

39. Orange Area Zone Graphic 2A

40. If you are added to or in a changed flood zone • Check the maps! • Maps online at FEMA website • If you are not sure if you have been added, check with Town Hall • Have homeowner or NFIP (through insurance agent) make flood zone determination independently

41. What does it mean if I have been added or changed? NOTE: Flood zone determinations may require an elevation certificate. These are done by land surveyors. NFIP believes that going forward, all flood insurance will require an elevation certificate to determine rates

42. Key Determination Facts: • Since the NFIP insures structures, the STRUCTURE must be in the flood zone, not just the land. • Since premiums are determined on lowest floor, if you have a basement, it will be your lowest floor. More on this soon…..

43. What does it mean if I have been added or changed? • Under the HFIAA, primary residence, Post-FIRM secondary residence and Post-FIRM Businesses continue to be grandfathered, even if sold Add diagram

44. What does it mean if a structure is added or changed? • Property types of most concern: V or A properties with basements. Why? Because in the case of a basement, as mentioned in graphic 1A, the basement is considered your Finished First Floor. Pre-FIRM Non-primary residence, Pre-FIRM businesses severe repetitive loss, etc…… immediately, or over the next 5 years sees rate hikes in SFHA.

45. NOTE: • ON AVERAGE: • In an A zone: For ever foot you are below BFE, it will cost around $1200+ Under BW-12 • In a V zone: For ever foot you are below BFE, it will cost around $2500+ Under BW-12

46. In the case of this house: Basement floor is 14’ below BFE The rough cost of premium: $16,800 Graphic 1A

47. In the case of this house: Basement floor is 14’ below BFE WITH A PRP The rough cost of premium: $415 Graphic 1A

48. In the case of this house: House is about 3’ above BFE The rough cost of premium: $500 Graphic 1C

49. What structure do I have? • Basement: any area of the building, including any sunken room or sunken portion of a room, having its floor below ground level (sub grade) on all sides. • Enclosure: That portion of an elevated building below the lowest elevated floor that is either partially or fully shut in by rigid walls. • Crawl Space: constructed so that the floor of the crawlspace is at or above the lowest grade adjacent to the building. Crawl spaces that have their ground below BFE must have openings to allow the equalization of flood forces.

50. Basement: Lowest floor is basement floor Crawl Space: With flood vents: Lowest Floor is first floor Without flood vents: Bottom of crawl space floor is lowest floor NOTE: Number of vent openings determined by size of space