FEMA Flood Maps: Homeowners, Towns in a Bind

Feb 3, 2014

Flood Insurance Maps: Homeowners, Towns in a Bind

Staggering increases in flood insurance rates are about to hit homeowners, especially on the Cape Islands and South Coast. The Federal Emergency Management Agency – or FEMA – has re-drawn its flood maps. So thousands of homeowners on Cape Cod, the Islands and South Coast will pay thousands of dollars more each year for flood insurance. 

Challenging the new maps is expensive and time-consuming, and most often, unsuccessful. But there are a few ways homeowners can try to reduce their rates – but they come with a cost.

Sean Riley is an engineer with Coastal Engineering in Orleans. Lately, he’s been getting calls from homeowners concerned about rising flood insurance rates. And the numbers he’s been hearing about are startling. “We’ve seen ranges from 10 to 50 thousand dollars a year, from 2 to 5 thousand a year,” he said.

"It's not as easy as just writing a letter and submitting it. There’s a lot of data that has to be drawn and collected."

Rate-shopping won’t help, because flood insurance rates are set by the Federal government. They rely on FEMA flood maps, which were recently re-drawn, with many homes included in flood zones for the first time. Homeowners can appeal the maps, but for most people, that might not make sense. Even a simple review of your property by an engineer can cost around $3,000. The cost for a more elaborate survey could easily top $10,000. And, as Sean Riley said, the process takes time.

“It’s not as easy as just writing a letter and submitting it. There’s a lot of data that has to be drawn and collected.”

After the new maps were released in May, homeowners had 90 days to study the maps and then appeal or comment on them. FEMA heard from 32 Cape residents about various issues. For all of Cape Cod, FEMA granted 3 appeals. It was Coastal Engineering that handled two of the successful challenges. Riley said his firm took on the appeals because there were clear indications that they would prevail. In one case, FEMA incorrectly identified a rock revetment as a dune.

“Unless you can really see that there’s an issue with it, the cost just far outweighs trying to take advantage of that,” said Riley.

Here’s how the maps work: FEMA establishes a benchmark on their maps called the base flood elevation. The rule says that the bottom level of a house – a basement or crawl space, for instance – must be at least one foot above the base flood elevation. If not, the house is in a flood zone. For new homes, it means tougher building codes based on the new maps. Houses will be built on higher foundations to avoid costly flood insurance rates. The problem comes for existing owners – people in homes built before 1968, when the flood map system began. But even for them, in some cases, there are steps that homeowners can take to reduce their flood insurance rates.

“You can add flood vents into an existing foundation, you can move your utilities from within the flood zone to above the flood zone to reduce your rates,” Riley said.

There’s another thing people could do to keep their homes out of flood zones. At least, there’s something Town Meeting members could do. They could vote not to approve the maps. When it comes up for a vote at Town Meeting, they could reject them. But going into it, voters should know that the penalties for not approving them are severe.

Portion of 2013 FEMA flood map for Chatham. Shaded area shows homes newly included in flood zone.

Dan Fortier is the Town Planner for Dennis, a town that will see 4,000 homes added to the new flood zones. That’s the most of any town on Cape Cod. At a recent presentation to the Dennis Planning Board, he outlined what would happen if Dennis – or any other Cape town – fails to approve the new flood maps. For one thing, residents would no longer be able to buy flood insurance.

“No property would be eligible for a Federally-backed mortgage from a Federally-backed bank, because they can’t get Federal flood insurance,” said Fortier. “It could dry up the mortgage availability for all of the properties that are located in the flood zone. They would either have to shop for a loan from a bank that is not Federally backed, or they would have to get private flood insurance before they could get a mortgage on a property.”

Not approving the maps also would mean the town would be ineligible for Federal disaster relief in the event of a natural disaster like Katrina. Fortier also worries about the housing market.

“Properties in the flood zones will not be able to sell, because buyers will not be able to find mortgages. They’ll have to do complete cash transactions in those areas,” said Fortier. “So losing the Federal flood insurance program in the Town of Dennis could have a huge financial impact on the town that would actually be larger than the financial impacts that are resulting from the rate increases in the flood insurance.”

Considering the downside, Town Meetings are likely to approve the new flood maps. But if homeowners think they’re wrongly considered in a flood zone, there’s still the open-ended option of appealing the maps after they’re approved by each town.