What home owners should know about FEMA, Homeowners Insurance, Citizens and Waterfront homes or homes in low lying areas of Florida.
October 25, 2022 By: Keith Robert Gordon
FEMA, Homeowners Insurance,
Citizens and Waterfront homes, low lying areas of Florida
Florida has witnessed the
loss of at least 6 major homeowners insurance carriers this past year partly
due to fraudulent roof claims and a string of high-wind storms over the past
few years.
I am a native Floridian, real
estate broker since 1984, and I spent 17 years living on Miami Beach
(1987-2003) watching Biscayne Bay slowly creep in the streets of South Beach, first
submerging the lowest lying areas - especially the King Tides. Miami’s Little
Haiti is now the hotspot because it’s at 11’ above sea level!
I now live in Kenwood, a
popular and quite high spot in St. Petersburg, Florida reaching some 40 feet
above sea level. I do not fear water or sea water surge in Kenwood, just the
potential for high winds.
While
climate change seems impossible to stop at this late point in time there are
some measures homeowners can take to get in front of the high cost of insurance
and the risk of being canceled by their insurance provider.
Whether
selling a home, getting homeowners insurance for the first time, or reducing
your chances of being dropped or surcharged, consider re-roofing at age 14 if a
shingle roof. In Florida, most insurance underwriters require at least 5 years
of useful life on a roof, and it is a rule of thumb in the real estate industry
and home inspectors that a roof after age 14 is considered “dead.”
All home buyers want a new or
like new roof. So, investing in a new roof might save on insurance costs
down the road and fetch a higher sales price when you do put your home on the
market. While you batten down the hatches, consider inspecting the hurricane
clips that connect the roof trusses to the exterior bond beam. These clips
ensure high winds won’t rip the roof off. Another thought is to have a general
contractor or engineer look at the bracing or racking of the roof. At times, adding stiffing wood can prevent twisting of the roof and
roof failure.
A most obvious danger is a tree falling on the home during a
wind, rain, or storm event. The amount of weight added to a tree when drenched,
along with saturated and soggy ground, is the main cause for a tree to
fall. It may be time to create some
firewood.
Everyone
in Florida wants hurricane windows and doors for added protection but they are
quite expensive. The benefits are lower energy bills, crime prevention and
insurance costs. All these benefits should be considered before paying
excessive insurance rates. Impact windows will prevent a window from being the
source of failure.
Another
expensive consideration for waterfront homes is raising the seawall cap. The
ideal maneuver is to raise it at least 18” and widen the cap to be more people
friendly. This could cost $20,000 to $50,000.
Is FEMA and Citizens a ticking
time-bomb for waterfront values?
Scientists are predicting sea
level changes based only the data they know. It is
what they don’t yet know that concerns me. Will these scientists change their
timeline about the speed at which sea levels will change? I believe this trend could
accelerate, thus catching many by surprise and exacerbating the impact in low-lying
flood prone areas.
Will FEMA Subsidies be on
the chopping block (again)?
Currently, the flood
Insurance program serves 5 million people, of which 20% receive FEMA subsidies.
When private insurance companies fail, Citizens fills the gap but at who’s
expense?
FEMA is criticized for
encouraging development in areas that are prone to flooding while other
homeowners outside these areas are sharing the cost by indirectly using their
tax dollars to support possibly the wealthier homeowners living in coastal
areas. This is what Citizens does.
Homeowners
that buy flood insurance pay about 2-4% of “value” annually. The flood
insurance rates if not subsidized by FEMA would be closer to 10-12% of
value.
Biggert-Waters
Flood Insurance Reform Act of 2012.
Biggert-Waters proposed a
gradual 5-year increase in flood insurance rates until such time as rates find
“market” levels without federal subsidies. The market instantly reacted and rates started climbing until the National
Association of Realtors lobbied and others successfully stopped Biggert-Waters
Flood Insurance Reform Act from advancing and replacing it with a new bill
called “Flood Insurance Affordability Act of 2014” reversing the 2012 austerity
bill and delaying the inevitable.