New flood insurance requirements pose concerns for coastal homeowners

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By John Droz, Jr.

EASTERN NORTH CAROLINA — Most people tend to believe that Flood Insurance only benefits Coastal Areas and surrounding tributaries. Nothing could be further from the truth. Consider, for example, areas with storm water drainage systems that operate on pumps to take the water from the street and pump it away from residential housing and businesses. These pumps operate on electricity. If the storm that causes the water to collect in the streets is heavy enough and there is a loss of electricity, where does the water go? The answer is that the water continues to build and could threaten the first floor living area of houses and particularly business establishments in the area.

Such was the case, in Sacramento Calif., several years ago. So when you think about who needs flood insurance, your perspective might be somewhat different in light of the foregoing. Then, consider the same situation in an area such as much of eastern North Carolina, where most areas in the coastal counties, do not have storm water management systems and you can recognize very quickly that the build up of rainwater is a huge threat to your homes and businesses if you encounter a large and persistent rainfall which causes a general condition of flooding in the area where you live and work.

If you think that this situation is implausible, and that you do not need flood insurance, you would be sadly mistaken. And, if all of that were not enough, you find out that the risk of damage from flooding has been increasing and that the Federal Government is the root cause of that increased risk. How did they do that you ask? Please take note of the information that follows, and if you do not have Flood Insurance, you should contact your local insurance agent.


For several years now, we have heard from President Obama that our greatest national security issue was what has been dubbed as “climate change.” In the context of this issue, the same computer modeling that has been performed to address this question has also been used to predict sea level elevations and its relationship to land mass areas. The Sea Level Rise (SLR) committee has been studying this matter for several years. Now the SLR has collided with the NFIP, causing conclusions to be reached about coastal communities and the severity of the impact on these areas.

There are two reasons that these apparently unrelated issues have merged. One is that the government (FEMA) has lost a lot of money and the other is that there are powerful political forces within the federal government who have been promoting global warming, a.k.a., climate change.

These two interests came together to write and pass the 2012 Biggert-Waters Act — known as the Flood Insurance Reform Act — which was part of a 584-page bill identified as HR 4348. The section of the bill which covers this subject was only 63 pages in length, but a one page extraction points to the following:

The Biggert-Waters Act mandates that anticipated Sea Level Rise must be incorporated into future flood maps.

In point of fact, existing SLR has always been incorporated into flood maps, but now they are requiring future speculative SLR to be added. In other words, the flood mapping and insurance program will change from being exclusively based on the last 100 years of historic data, to a program that is significantly influenced by future computer models and guesstimates. These future speculations will be concocted by unknown computer programmers, making unidentified assumptions, based upon questionable science and unproven scenarios.

In order to implement this, the Biggert-Waters legislation established a national committee known as the TMAC, otherwise known as the Technical Mapping Advisory Council. This organization recently came out with its own official recommendations and selected NOAA as the source for their future SLR numbers.

This group claims that we could have over six feet of SLR by 2100. It is quite ironic that the Biggert-Waters Act requires that NOAA use “best available science” in determining projected sea level rise.

This legal phrase has become an inside joke– somewhat like the repeated posting of a 55 MPH speed limit on the beltway around Washington DC, where everyone is going at least 75.

In this situation, either NOAA has no clue what is meant by the term: best available science, or they know that they will not be held accountable for noncompliance.

So you ask: What does all this mean? The worst case scenario is that every existing coastal flood map could have over 6 feet added to it. But for the sake of discussion, we will assume that only 3 feet is added in the near term.

That will mean that many new properties will be in flood zones.

That will mean that no matter what flood zone properties are currently in, that most all of them will be elevated to a higher-risk category

That will mean that the flood insurance rate on essentially all coastal properties, will likely increase by a very large amount

That will mean that a significant number of coastal properties will inevitably be declared as uninhabitable.

Again, all of this is based upon speculation driven by political agendas and none of it is derived from real science.

Some people have said that this would not happen for several years, as it will take them that long to change the flood maps. That is fanciful at best. Drawing new flood maps to include a new SLR component will be relatively simple. FEMA will take existing maps, and add a certain number of feet to various parts of it, which can all be done by computer in a few days. Further, even if it does take a few years, so what? Do we want to fight to prevent this foolishness today or in 2018 after a large SLR factor has been officially added to all Coastal Flood Maps?

So what do we do? The Act was passed by Congress, so it can be amended by Congress: to delete the SLR mandate. We need to get our federal legislators to take action. In 2014, Congress did amend the Act, based on rate complaints from the public. This is a much different and much more serious problem than that. If Congress is genuinely concerned about the economics NFIP, then there are several legitimate ways to address that problem and some are mentioned herein.

Clearly, the Act needs to be amended immediately and a good place to start is for NC coastal counties to pass a Resolution advocating that they do so.

Everyone knows that a lot of this came about because of FEMA expenditures for Hurricane Katrina and Hurricane Sandy. However, independent experts have stated that when considering flood insurance premiums versus flood insurance claims, the program is actually in the black.


As a former adjuster of Flood Insurance Claims, in all sorts of catastrophic and non-catastrophic conditions, one of the problems that we have encountered is that the vast majority of policyholders think that they are buying an insurance policy in the traditional sense.

What they fail to realize is that the Flood Policy is an Act of Congress, which might give some people insight into the misconceptions that people have about what they are covered for and why the coverage is so difficult to understand.

In addition, as stated before, a flood that involves your property and a couple of surrounding properties — but not the community in general — is covered under the flood policy. Therefore, in that sense, the coverage is broader than the average person might conclude, making it more practical to have a Flood Policy.

But, the coverage is very restrictive is limited to certain maximums, which may not apply in all communities as to the value of the properties in that community. For example, properties in the Outer Banks are more valuable than the same size property in Elizabeth City, all things being equal. Having your risk (dwelling) underwritten is a major element in how you manage to settle your claim, should a loss occur.

As to the basis of this article, the risk of bureaucratic oversight into the property that you have and how you are able to get flood insurance to protect your interest in the property and that of your mortgage company, is going to be highly speculative and potentially very expensive in the future.