Homeowner Flood Insurance Affordability Act of 2014 & Why Foundations Matter in Highlands

claudetteOn 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Even though Claudette paid her Flood based on an AE in 2012, it was actually a V-zone and the Biggert Waters Act rescinded that grandfathering, hence placing her back into a V-zone.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.


  1. This is exactly why we built to a V when we lifted.  When I bought in 2002, we were a VE12.  The new FEMA maps has us at AE11.  To us, especially  after Sandy, it seemed counterintuitive that our height and designation be lowered.  So when it came time to lift, we went to 14.5 feet BFE and steel reinforced concrete piers.  Many people said we over-built but we are only doing this lifting madness once 🙂


  2. HI Claudette here..
    After spending countless hours on the phone with Senator Menendez staff , FEMA in DC and locally, reporters from Gannett news , NY Times, and Chasing NJ here is where it is now for all local residents including myself..
    We will be an AE 11 +1 with the +1 being a Highlands requirement. This rating is due in part to our “bulkhead” , similar to Seabright and their “sea wall” (in case you weren’t aware Seabright is an AE 11and was never put into a V zone, imagine that).
    Our flood plains manager ,Dale Leubner, has been instructed to follow the “soon to be adopted maps”, and that is what FEMA in D.C. told me he MUST do. All 51 houses that I counted in lower Highlands that are on “solid” foundations are following the proper rules for an AE 11 +1 zone BUT until all the FEMA insurance representatives go through yet another 2 day training next week to teach them how to properly rate policies there will continue to be major discrepancies between third party insurers writing flood policies for NFIP. This is in addition to the fact that FEMA has to be pushed into getting the “adopted” maps signed immediately and not 16 months from when the bill was passed in March.
    Senator Menedez is pushing for an immediate hearing to get this done and he is using our case as the example of the disarray that NFIP and FEMA are in and how residents all along the coast , not just myself ,are being unfairly charged. In addition to this I am working to try and have the banking industry change the requirement for flood insurance on mortgaged homes AFTER said home has received ICC monies and FEMA declares that the home is in compliance with their flood mitigation requirements. Having a policy on homes that are 12- 16 feet in the air with only a garage or piers underneath them that are NOT COVERED under said policy is ridiculous. Contents in said garage or under the house that are below the FEMA required heights are exempt from coverage also. Exactly what is being insured by flood insurance for a house 12- 16 feet in the air ?
    So the fight continues for us and our 15.9 foot house in the sky..

    Side note:
    In addition to all this our local FEMA representative, Jack Shea, has stated that our bulk head is going up another 3 feet, supposedly in the next 2 years which will also be taken into consideration when rating policies. If that wasn’t so sad it would be funny…


    • The bulkhead going up…is that the Army Corps of Engineers project? The one where the plan won’t be finalized for another 2 years? The plan where the town could decide not to proceed?

      Or is this for a plan that I’m not aware of?

      Stay strong! We’ve got your back. Thanks for taking on this fight. Homeowners up & down the coast owe you one.


  3. I’m confused cause it clearly says that bill i reinstates grandfathering? This is a Menendez bill he should be able to clear up, no?


    • Reinstates grandfathering – Repeals the provision in Biggert-Waters that would have terminated grandfathering. If grandfathering was terminated, property owners mapped into higher risk would have to either elevate their structure or have higher rates phased in over 5 years. The Menendez/Grimm Bill allows grandfathering to continue and sets hard caps on how high premiums can increase annually.


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