By The American Shore and Beach Preservation Association
Coastal dwellers around the nation got two pieces of good news from Congress recently – one to help those who live in areas affected by the Deepwater Horizon catastrophe and the other to save a program that protects coastal (and riverine) properties throughout the land.
Tucked in the recent Highway Reauthorization Bill (strange bedfellows, but that’s how Washington works) were the RESTORE Act and a reauthorization for the National Flood Insurance Program (NFIP). The former will earmark 80 percent of the Clean Water Act fines from the BP oil spill in the Gulf of Mexico for a trust fund to benefit projects in the five Gulf states most affected by the disaster. A broad coalition of groups came together to push this legislation forward, and its success is a welcomed sight.
Equally welcomed by coastal property owners (particularly the 5.6 million properties currently covered by the program) is the news that the NFIP not only got re-upped – for five years, no less – but that the first steps of overdue reform for the program were part of this package. However, since these measures may have unintended or hard-to-track consequences, it’s a good idea for those who participate in the NFIP to check on specific issues that might impact their properties once all the details filter out, so you can plan ahead should your coverage or premiums change.
Among the changes:
How properties built before the NFIP was in place are insured will be changing, with rate subsidies being removed from some properties (second homes, business properties, some previously damaged sites) and eliminated for others. Subsidized rates will also be able to rise by 20 percent per year, rather than the current 10 percent.
Flood insurance will be available for some multi-family dwellings that had not been previously included in the program.
Restrictions on payments on a less-than-annual basis was eliminated, which means monthly or quarterly premiums will be possible eventually.
Properties in the NFIP which are protected by a levee or dam will be facing higher premiums, in conjunction with a new effort to assess the worthiness of federal dams in order to pro-rate premiums down the road.
A reserve fund for NFIP will be established, which will probably mean higher premiums but more fiscal security for the program.
Finally, a new effort in the program will use scientific data as part of the claims process post-disaster to help determine the cause of damage (and, thus, payment) when both wind and water are the flooding causes. For properties caught in the crossfire between water and wind coverage – and then often left short in the eventual payment – this could be promising news.
Putting the NFIP on a path to better financial security and getting it off the short-term reauthorization cycle where it had been trapped for years are good news for property owners. However, some of these reforms could have an impact on your property (even though they may be good for the program overall), so take a look at the particulars and be prepared.
The American Shore and Beach Preservation Association was founded in 1926. The ASBPA promotes the integration of science, policies and actions that maintain, protect and enhance the coasts of America. For more information on ASBPA, go to www.asbpa.org, Facebook or www.twitter.com/asbpa.