Why aren’t the federal flood insurance limits at least equal to the amount the federal government backs the Fannie Mae loans? Why haven’t federal housing policy flood limits kept pace with inflation? Why do they remain the same for over a decade? And why aren’t the increased costs of compliance coverage up to $100,000, so people can rebuild to the new flood standard?
I thought about these questions when I read a Sarasota Herald main article, The FEMA rule could mean many can’t afford to rebuild after Hurricane Ianwho noted:
Thousands of Southwest Florida homeowners whose homes were damaged by flooding from Hurricane Ian are running into a bureaucratic buzzsaw that could force them to demolish their properties and rebuild at higher elevations.
In response, some local governments are seeking solutions to help homeowners avoid wholesale rebuilding, but since the rules are designed to prevent future flood damage, it seems unlikely that federal officials will relax the rules.
This will likely prevent some property owners from rebuilding as they cannot afford the cost of building higher.
The total number of properties affected by the Federal Emergency Management Agency requirements in question is not yet clear, but it is likely to be significant. Many homeowners may not yet know the difficulties they will face if they are not far enough along in the rebuilding process after Ian.
In worst-case scenarios, the additional costs imposed by federal regulations can mean homes must be brought down to their concrete slabs and several feet of fill dirt brought in to raise a site above the site̵7;s base elevation before a homeowner can even begin to rebuild.
In an insurance world where every insurer has penalties for not insuring for value, the current federal flood program is underinsuring many of its insured structures. Why? I can find no answer to this other than Congress has not raised the flood policy limits. While the federal government insures mortgages for much higher amounts, it does not require that these financers insure to the value of the mortgage. It does not add up.
I don’t mean to beat a dead horse, but the 50% rule is very much a relevant part of any significant Hurricane Ian and Nicole adjustment, as I hinted at, Can you get around FEMA’s 50% rule?
Life is like riding a bicycle. To keep your balance, you have to keep moving.