Flood Insurance: What You Need to Know

Flood Insurance: Residential and Non Residential

The occurrences of recent hurricanes such as Katrina and Sandy have caused the entire flood protection, insurance industry, to reevaluate their positions, as well as their balance sheets. The phenomenal costs of trying to finance the restoration as well as the replacement of property due to damages caused by these hurricanes were, and remain overwhelming. Anyone listening to the news will quickly understand the efforts being conducted to reconstruct areas that have been decimated by the storms. The now famous walks on the beach by politicians and activists have become cornerstones in their attempts to obtain funding for the rebuilding of the shorelines. The devastation of hurricane Sandy, in the lower Manhattan area, awakened the industry, as well as important City governments, to the realization that the damages caused by rising water levels, as well as the potential for future substantial losses due to flood waters and flooding occurrences, will become an increasing financial burden on property owners, as well as the insurance companies.

I have spent considerable time building in many of the major Cities throughout the country, and can recall the torrents of water that would pour down the subway entrances, from the streets of Manhattan, during a heavy thunderstorm. Or the ponds of impassable water that would collect in the lower areas of Miami and Brickell, causing pedestrians to circumnavigate around the deeper water and find alternate routes to their destinations.

Water has always been an issue in the construction industry, and we have devoted several webpages of this website to the management of water issues, as well as rising water levels during the construction of a building project. This website has devoted written explanations of how to waterproof your homes and landscape the exterior of the yard to eliminate or minimize the effects of water flow and flooding.

However, the issue of flood insurance has not been addressed, and the expense of flood insurance has evolved into a substantial problem and financial burden, for homeowners as well as commercial property owners located within the flood plain. It appears that flood insurance will become a larger burden, as water levels rise and large storms cause increased damage.

This webpage is devoted to discussion and explanation of this issue, as well as what the future of flood insurance may hold in the next several years.

FEMA is the official agency that is devoted to the establishment and management of emergency situations throughout the country. FEMA stands for Federal Emergency Management Administration and has considerable power and prestige within the Federal Government. The terrible occurrences of 911 brought FEMA to the forefront, and the recent flooding due to Katrina and Sandy, as well as the severe flooding within the mid Atlantic States very recently experienced, has kept the agency in the forefront of activities, programs and procedures for handling emergency management issues within this country.

FEMA is responsible for the NFIP, or the National Flood Insurance Program. This program was established to subsidize the costs of flood insurance to both residential and non residential property owners within the flood plains, as established by the FEMA flood control maps. These maps were not updated for several years, prior to the severe flooding and water damage caused by hurricanes Katrina and Sandy, and most recently, the additional damages caused by river and stream flooding.

The causes and reasons for the increase in damages occurred during flooding and water issues will not be discussed within this webpage. As with all important issues concerning the country, the reasoning for the increase in occurrences, has been politicized and diluted with different points of view, depending upon either your political aspirations, your status within the government, the location of your property, etc. For purposes of this webpage, let’s simply agree that it appears that water levels are rising, for whatever reason, and that water and flooding damages will be increasing as these water levels increase.

The NFIP (National Flood Insurance Program) under the guidance and direction of FEMA is for all intents and purposes totally broke. The program is basically regarded as currently bankrupt due to the costs incurred by the program, to assist property owners in restoration and reconstruction, as a result of the damages caused by hurricanes Katrina and Sandy. The insurance premiums and other revenue that had been accumulated by the NFIP were not adequate to cover the substantial losses incurred. This situation has become a threat to all insurance companies that ensure damages or liabilities, due to water infiltration, which cannot be accurately predicted or quantified.   There are separate industries employing highly trained professionals, who study the actuarial chances of losses for these insurance companies, and manage the balance of loss and revenue within these companies. Similar to the airline industry, too many crashes, and the airline will be forced to shut the doors due to the unbalanced costs verses revenue that the company has charged, to provide their insurances.

Due to the fact that the NFIP is basically without additional funds, FEMA has decided to reduce or basically eliminate all subsidies to property owners. The subsidy program will not be available to assist property owners with economical flood insurance coverage. In lieu of these subsidizes, FEMA has decided to update their floodplain maps throughout the country, substantially extending the boundaries originally established, requiring specialty flood insurance. This updating of the FEMA floodplain maps is currently occurring, and appears to be a constantly changing activity, based upon the most recent flooding events. The task of updating maps of floodplains throughout the country is a daunting task, and each time a new flooding occurrence causes property owner damages, new data emerges, placing sections of the country that have never been within a flood plain, updated, and changing their status.

Without the financial assistance of FEMA subsidies, the agency has created a program to allow private industries to offer flood insurance, if certain specific stipulations and requirements are maintained. These stipulations or requirements are intended to protect the property from flood water damage, and therefore maintain a level of flood insurance premiums that are within economical limits.

The following requirements have been established by FEMA to allow a property to qualify for a FEMA flood water mitigation certificate. This certificate establishes the elevation of the property, the BFE, which is the established base flood elevation of the region, as well as verification of the completion of FEMA requirements to establish a designed elevation, which is an elevation above the BFE that has been constructed to waterproof the structure in accordance with the FEMA requirements. In addition to this designed elevation, additional waterproofing can be established to create a freeboard of additional height, further protecting the structure from resultant flood waters. This freeboard is the number of feet above the designed elevation that is established for safety or margin of error, to further protect the structure. Common sense will indicate that the higher the final freeboard elevation, the less the final amount of flood insurance premiums required.

Residential Property

If you suspect that your property is located within the established floodplains as identified by FEMA, the next step is to review the current FEMA map, which is found online, identify the FEMA zone your property is located in. This review is, in many instances not required to be done, by you the homeowner, due to the notification, by your insurance company that the property is within the FEMA floodplain zone. Your insurance company will not provide floodplain insurance without notifying the property owner of this requirement, due to its inherently high cost. Flood insurance within the FEMA floodplain zones, especially now, is substantially higher than standard insurance, and your insurance company will be extremely efficient, regarding this notification. This webpage will not address the specifics of each zone, however it will offer you a summary of the provisions required to establish flood water mitigation for your residential property.

The residential requirements are relatively straight forward.

1.) There shall be NO living space allowed at, or below the BFE. The BFE is the base flood elevation that has been established by FEMA based upon the location of the property. (BFE elevation and zone determination can be found on the FEMA website)

2.) The allowed first floor living area elevation is determined by FEMA and will be noted within the website. The first floor living elevation is identified at the top of the sill for the front door.

3.) All mechanical utilities, as well as electrical utilities, must be located above the BFE elevation as determined by the FEMA website.

4.) All utility connections, pipes and conduits must be engineered to address the flood waters and correspond to the FEMA requirements. This may include backflow preventers, toilet one way valves, water and sanitary line capping, etc.

5.) Dependent upon the established zone for the property, the lower level, below the first occupied floor, can either be enclosed with proper flood venting installed; this venting will allow the water to enter the elevation and exit through water relief louvers installed within the lower level perimeter foundation walls or kept open. Homes directly on the coastline and located within the actual surf area of the coast, will require the water to flow under the structure, without any obstructions beneath the living elevation of the home. This requirement involves the lifting of the home on piles to a position where the first living elevation is at, or above the required FEMA elevation, while allowing the unabated flow of water, under the home.

6.) Renovations performed on homes that are existing, if valued at 50% or over of the total value of the structure, will require full compliance with all current FEMA requirements, to obtain a proper building permit. Unfortunately the ability to obtain economical flood insurance for the structure will require compliance with the current FEMA elevation requirements, whether work is being performed on the property or not.

Compliance with the residential requirements in accordance with FEMA regulations, is straight forward, there is simply no residential occupancy allowed below the BFE and the designed elevation as defined by the current FEMA maps. The lower areas can be used for parking of vehicles, storage or open space, however NO residential occupancy is allowed.

Non Residential

The non-residential regulations, as noted by FEMA, allows the occupancy of levels at, or below the BFE (base flood elevation), if provisions are followed as required by FEMA guidelines.

The basic requirements to achieve occupancy of levels below the BFE are focused on waterproofing the entire structure below the BFE grade, allowing the structure to float, if inundated by flood waters. The entire perimeter of the structure must be waterproofed in such a manner as to only allow only the minimum amount of water as stated by FEMA regulations and conditions.

In general, the amount of water allowed by FEMA is a 4 inch depth accumulation within a 24 hour period of time.

Once these parameters are realized, the issuance of a FEMA, flood mitigation certificate can be obtained, allowing a much more economical cost for flood insurance. This certificate can be found on the FEMA website and must be filled out and certified by a licensed architect or engineer, registered within the State where the property is located.

How does an owner comply with the current FEMA requirements, allowing a FEMA flood mitigation certificate to be issued?

Similar to the residential property, if you suspect that your property is located within the established floodplains as identified by FEMA, the next step is to review the current FEMA map, which is found online and identify the FEMA zone your property is located in. This review is, in many instances not required to be done, by you the property owner, due to the notification, by your insurance company that the property is within the FEMA floodplain zone. Your insurance company will not provide floodplain insurance, without notifying the property owner of this requirement, due to its inherently high cost.

This webpage will not address the specifics of each zone, however will offer you a summary of the provisions required to establish flood water mitigation for your nonresidential property.

  • In accordance with the FEMA website, the BFE (base flood elevation) will be noted on the FEMA flood plain map.
  • The BFE is the elevation that has been established by FEMA as they update their flood plain maps and identify structures that are within these floodplain zones.
  • There are various zones established by FEMA, and as common sense would indicate, the closer to the water, the more stringent the zone. However, due to the expansion of the floodplain zones, there are many structures that were never in floodplain locations, that are now located within the new parameters.
  • FEMA has established various parameters that will NOT allow the property owner to secure flood insurance, no matter what types of waterproofing efforts are made on the properties. For example, if the structure is located in an established flood waterway, or the structure is located within a Z zone, there is no modifications that can be performed to allow the issuance of flood insurance and the ability to obtain a certificate of occupancy. The best method of determining whether your nonresidential property is located within this zone is to review the FEMA floodplain maps and contact a professional engineer or architect that has experience with the latest FEMA

Assuming that the nonresidential structure is located in the AE zone, which allows the waterproofing of the structure to the BFE (base flood elevation), the following information is pertinent.

  • FEMA will issue a Flood mitigation certificate to a nonresidential property owner located within an AE zone if the following modifications are made on an existing structure, or a new structure is built in accordance with the FEMA
  • The structure must be waterproof to the BFE ( base flood elevation)
  • To comply with the FEMA elevation requirements, the designed waterproof height must include a minimum of a one foot of freeboard. The freeboard dimension is the additional height of the designed elevation above the FEMA provided BFE. This additional waterproof height, will provide a safety factor, to ensure that the structure is not flooded. The higher the freeboard, the lower the final cost for flood insurance.
  • The maximum water infiltration, which FEMA will allow within the structure is a 4 inch accumulation within a 24 hour period.
  • Systems must be designed to remove the standing water that results in infiltration. These systems must consist of properly constructed accumulation systems, as well as discharge systems, to remove the infiltrated water from the interior of the structure.
  • Foundation elevations must be waterproofed to ensure that water does not infiltrate to the interior of the structure in quantities that exceed the FEMA requirements.
  • Utilities must be equipped with flow valves to prevent the influx of flood waters through the utility conduits, piping or chases.
  • All openings in the foundation, such as door, window or louver openings must be properly protected to ensure water infiltration compliance.
  • Licensed engineer is required to evaluate the structure to identify buoyancy situations that could occur due to flood waters. The interior slab must be engineered to withstand the pressures sustained during a flood occurrence.
  • All construction elements must be installed to properly comply with FEMA requirements and must be tested and approved, prior to installation by independent testing agencies.
  • The FEMA Flood mitigation certificate must be certified by a licensed engineer or architect registered within the State that the property is located.

Flood requirements will continue to increase as the threats of flooding increases. The occurrence of hurricanes and heavy tropical storms within the country will continue to cause flooding damage and the need to further regulate construction and the renovation of structures that are located within the floodplain.

FEMA requirements are continually being updated and the floodplain maps are rapidly expanding to include structures that had never been subjected to flood insurance requirements. It is important that communication be established by property owners, that must comply with the FEMA requirements, with experts on the subject of flood protection, and the increasing provisions necessary to obtain FEMA certification.

I would suggest that any additional questions and or concerns regarding updated FEMA requirements, as well as assistance with establishing the necessary construction components to comply with FEMA’s dry flood proofing of structures, by addressed to www.nationalfloodprotection.us.

No matter what political side of the aisle you may subscribe to, the damages and destruction that has occurred due to flood waters in recent years cannot be denied. It is important that all property owners that find themselves within the floodplain locations, as described by FEMA, understand the dry flood proofing requirements, and strive to reduce their flood insurance premiums by complying with these requirements.

Good luck, and stay dry!

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