On March 21, 2014, the POTUS signed into law the “Homeowner Flood Insurance Affordability Act” of 2014, which amends the 2012 Biggert Waters law.
In a nutshell, the intent is to:
- 1) Repeal the property sales trigger requiring that buyers immediately pay full premiums at the time of purchase. (So if you sell the new owner won’t have to pay a $43k flood bill)
- 2) Restore the grandfathering of rates under zones when properties were built to code.
- 3) Limits future increases to 18% annually for most properties built after 1975 and 25% for older properties until they are paying full cost for flood insurance. (How many houses in Highlands were built AFTER 1975)
- Refunds any premiums over the 18 – 25% increases. (you’ll understand why this is important in a minute)
The difference here from earlier versions of the bill, is that earlier versions would have “paused” the increases until FEMA reported on affordability, this version hits the ‘reset’ button back to the pre-2012 levels and cap all increases moving forward.
While this bill goes further in making permanent changes to law and providing refunds for over charging, the flip side is the bill allows for 8 to 16 months for FEMA to issue the regulations to implement these changes. Hence Highlanders may not be helped by these changes reflected in rate quotes and insurance renewal notices right away. It is going to depend on your Insurance Providers interpretation of the bill.
So going back to Sea Drift resident Claudette D’Arggio’s $43K insurance bill
NJ Manufacturers came back to her and said they would issue a new pro-rated bill of $7700, assuming that the AE zone for that part of Highlands would be signed into effect in August. However, there is no guarantee that it will be signed into effect this August and could take years to sign.
NJM’s premise is that:
Even though Claudette’s house is at a 15’9 BFE, she has a full foundation and is not built to a V-Zone
Highlands was put into a V zone after 1992 storm.
Even though Claudette paid her Flood based on an AE in 2012, it was actually a V-zone and the Biggert Waters Act rescinded that grandfathering, hence placing her back into a V-zone.
The HFIA bill allows for 8 – 16 months before FEMA has to issue the changes to Insurance providers, so NJM doesn’t have to adhere to the bill with respect to grandfathering until FEMA issues the changes.
FEMA has not yet signed into effect the new designation of AE so NJM doesn’t have to recognize it.
So the crux is she was (as most of Highlands around the Capt Cove area) grandfathered into a AE zone when she bought her house, but with the Biggert Waters Act in 2012, the grandfathering of the zone was rescinded and she was automatically (unbeknownst to her) brought into a V-zone. The fact that FEMA has plans to rezone that whole area back to AE, but not signed it in effect and she lifted her house and built her foundation based on what her zone was recognized as in 2012 (AE) as well as what FEMA plans to assign to the area (AE), seems to be inconsequential.
She’s stuck between a rock and hard place. She has been working diligently with Senator Menendez.
as well as speaking with the head of FEMA trying to straighten this out.
Note to self, height and foundation could matter in Highlands.