RALEIGH, N.C. -- Flood insurance policyholders who suffered losses in any of the three devastating hurricanes that raked Eastern North Carolina this season may have some extra help covering the added costs associated with rebuilding or relocating their homes.
That help is in the form of extra coverage incorporated into all National Flood Insurance Program (NFIP) policies written or renewed after June 1, 1997. The added coverage, which increased annual premiums from $4 to $75 depending on risk, provides up to $15,000 to offset homeowner costs associated with bringing the home into compliance with local floodplain management ordinances.
"The new Increased Cost of Compliance provision in flood insurance policies is designed to help policyholders take the steps required to reduce future flood damage to their homes and businesses," said Federal Coordinating Officer Glenn Woodard of the Federal Emergency Management Agency (FEMA). Those steps, said Woodard, can include elevating, demolishing or relocating buildings located within special flood hazard areas that are substantially damaged or subject to repetitive flood losses.
Substantial damage is defined as a repair cost of 50 percent or more of the structure's pre-flood market value as certified by local officials. Under NFIP rules, these major repairs are treated as brand new construction and must be rebuilt in accordance with current ordinances, which may require elevation or relocation.
The provisions for repetitive damage losses apply to homeowners who have filed at least two flood insurance claims during the past ten years with damage averaging 25 percent of the market value each time. Woodard explained that in return for flood insurance being made available to property owners in a community, local officials must adopt and enforce various ordinances designed to reduce future flood losses by regulating new construction. Repetitive loss provisions only apply to communities that specifically enact ordinances to enforce those provisions.
"We believe $15,000 is a significant contribution toward reducing future flood damage to a property," Woodard said. "While it may not cover all the costs associated with meeting local floodplain management laws, property owners should ultimately recoup their investment in terms of increased property value and peace of mind."
Nationwide, there are more than 4.1 million NFIP policies in force in over 19,000 participating communities providing $496 billion worth of coverage.