Check Your Bill: The FEMA Flood Flop

Homeowners in flood zones (including most of West Boca and South Florida) should watch their flood insurance premiums closely. A recent policy change will cause most of us to face a surcharge of $25. But if you’re not careful the surcharge will be $250 instead. Flood damage can be detrimental to a home and must be dealt with quickly by using such things as flooded carpet drying services, however, this can be harder to do if homeowners are paying over the odds for their flood insurance.

Owners of single family homes and individual condo units will pay the $25 surcharge, but only if it’s their “primary residence” meaning they live there for 80% of the year, though more than 50% may be enough. Otherwise the surcharge is $250. We’re sure our snowbird readers will enjoy that.
Check your latest flood insurance bill to make sure you’re not getting hit with a big increase.
This was a bipartisan surcharge supported by our local congressman, Ted Deutch (D), and Senators Bill Nelson (D) and Marco Rubio (R). All three voted for this.
It gets worse. FEMA set this up in a way that is designed to screw people. They sent out a mailing that you’re supposed to respond to, proving that your house or condo is your primary residence. If you don’t get it or don’t respond, you pay $250 instead of $25.

In other words, the government assumes your home is not your primary residence and the burden is on you to notice the new rule and prove you live there.
Fortunately for us we noticed the increase and our insurer got us the form before the bill was due. We should have this resolved shortly. Here’s the form we were sent:
[gview file=”https://westbocanews.com/wp-content/uploads/2015/07/primary_residence_verification.pdf”]
For any readers who pay flood insurance, we recommend you check your latest bill and compare it to the previous year. You can visit the website to find out more information about water damage coverage for your condo. Ours went up nearly $300, and it’s more than $200 higher than it should be under the new law.
You can be sure that if Citibank did this to its customers there would be outraged politicians calling for their heads. But when the government does it to us apparently it’s okay.
We heard from one of our regular readers, Angela Sapone-Brunelle:

Funny you should ask as my bill just came in today. Yes, the premium nearly doubled. In 2014 I paid $379 and the new bill states the policy costs $662. I was so excited because my overall homeowners insurance went down $200 this year…NOW I KNOW WHY! I never knew I could get such cheap homeowners insurance!
…
OK, I figured part of this out. I have to sign an affidavit that states the house is my primary residence, then it will go down to $437…still a 15% increase, but not 75%.
…
And I thank you because if you wouldn’t have posted this, I may never had looked at my bill because it’s paid out of my mortgage escrow! My insurance co is making it really easy to turn in the affidavit, you just have to sign the form and upload it to their website with a copy of my drivers license.

We reached out to Congressman Deutch’s office and spoke with Communications Director Ashley Mushnick. She sent us the following statement:

Major hurricanes like Katrina and Rita left the National Flood Insurance Program with over $26 billion in debt, jeopardizing the only federal program that makes affordable flood insurance available to Florida homeowners. If we want affordable flood insurance to remain available at all in Florida, we must prevent the National Flood Insurance Program from going bankrupt. Yet when implementing reforms Congress passed in 2012 to improve the program’s fiscal footing, FEMA officials failed to keep rates affordable and thus undermined the entire purpose of the program. Some homeowners were informed that their flood insurance would cost more than $25,000 per year. That’s why we passed the Homeowners Insurance Affordability Act of 2014 to place limits on annual increases and require FEMA to maintain affordability into the management of the flood insurance program.
No one likes to pay an additional $25, but that is far more affordable than the multi-thousand dollar rate increases we were seeing before the Homeowners Insurance Affordability Act, and we must all share in the burden of restoring solvency to the vital National Flood Insurance Program.

From other conversation we understand the Congressman’s position (mirrored by our senators) that they’re saving us money because if they hadn’t acted our premiums would have gone up even more under the Biggert-Waters Act of 2012. But all three of them voted for Biggert-Waters in 2012. And Biggert-Waters would have increased premiums only for property owners who are not primary residents. It would not have affected most West Boca homeowners. Some homeowners may have previously planned for this, just to be on the safe side, and looked at home warranty florida services to use in case of damage.
Congressman Deutch’s statement also ignores the careless manner in which FEMA and NFIP are hitting primary residents with a $250 increase if they fail to prove they are primary residents, as well as the $250 increase faced by snowbirds and others.

Update
Congressman Deutch’s office added this:

It depends on when you bought the home, primary or not. People looking to buy a new home after the law took effect had to pay substantially more than the current homeowner. This made it very difficult for many people to sell their homes, and dissuaded people from buying homes. And, for primary residences re-categorized by the FEMA remapping process, the full-risk rate would be phased in over 5 years by 20 percent each year beginning at the end of 2014. And obviously, in South Florida with our large retiree population there are many non-primary residences, and many of them are not multimillion dollar beachfront second-homes. The bill language you pulled is from the short-term extension of Biggert-Waters – the bulk of the legislation is significantly longer and was tucked into a highway resurfacing bill (H.R. 4348 of the 112th Congress) as a miscellaneous section that passed in July 2012 as public law 112-141.