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New England has a close yet unpredictable relationship with water; be it the ocean or its abundant lakes and rivers. The latest storm to hit many New England coastal and riverine property owners involves the recent roll-out of Federal Emergency Management Agency's (FEMA) newly proposed flood insurance rate maps — maps that could hinder the rights of owners to develop their properties or dramatically increase insurance costs.
In the coming weeks and months, communities across New England in close proximity to bodies of water or the watersheds that feed them will receive preliminary FEMA flood insurance rate maps. In many instances, the new maps will shift flood zones further inland and upland, including more homes and businesses in high-risk zones. The escalating rates for federal flood insurance are another concern. Impacted property owners near lakes, rivers, or the ocean could experience significant consequences if the new maps are not successfully appealed.
How does flood insurance work?
For residents or businesses located in areas historically prone to flooding, obtaining flood insurance can be challenging and sometimes cost-prohibitive. Making matters more complicated, flood insurance is generally required by mortgage lenders to finance real estate situated in designated flood zone areas. To help alleviate many of these issues, the U.S. Congress created the National Flood Insurance Program (NFIP) in 1968. However, to participate in the program, communities must agree to develop management plans that reduce long-term flooding risk.
What are the effects of the proposed maps?
In response to the rash of more frequent and damaging storms like hurricanes Katrina and Sandy, FEMA has undertaken an effort to update floodplain maps. FEMA's maps illustrate regions that are prone to flooding by classifying them into various types of zones. Property owners in zones deemed to have a higher risk of flooding pay higher insurance premiums.
Many real estate owners are frustrated by the newly proposed maps because they greatly expand the coverage of high-risk zones. A property owner with a mortgage that is currently in a low-risk zone may now be forced to purchase flood insurance for the first time. Property owners currently in low to moderate-risk zones may now find themselves in a high-risk zone forced to pay additional thousands of dollars each year for insurance. Moreover, the enlargement of zones may also inhibit a property owner's ability to expand existing structures or force structures to be elevated above proposed base flood evaluations.
What options do property owners have after the proposed maps are released?
After FEMA's proposed maps are released to a municipality or "community," it is critical for property owners to remember two things: first, the maps are not final, and second, the clock begins ticking almost immediately. The community must notify property owners of the proposed maps in a local newspaper and following the second notification, a 90-day appeal period starts.
Property owners who are affected by the proposed maps should first inquire into whether the community plans to hire an engineering consultant to review and appeal the maps. If the community does not intend to appeal, concerned property owners should promptly consult an engineer and attorney to review their options. If a community plans to file an appeal, individual property owners should determine whether the community's appeal will provide relief to the individual property owner's parcel. If not, the property owner should hire an engineering consultant and attorney to ensure his or her property rights are protected.
In many cases, the community may be reluctant to initiate the appeal process unless local landowners voice concerns with the proposed maps. Property owners or their representatives should encourage the community to collect individual appeals on behalf of its residents and submit a collective appeals package to FEMA. Pursuant to federal regulations, the community must provide detailed evidence, "that the elevations proposed by FEMA are scientifically or technically inaccurate." The burden of gathering such scientific evidence often falls on the property owners.
FEMA's Newly Proposed Flood Insurance Rate Maps