Follow The Rules and Pay 300% Above Average for Flood Insurance

FEMA says the average annual flood
premium is less than $1,000

By Mark E. Ruquet

You would think that when you do everything asked of you by authorities you would be rewarded. For one Midland Beach resident rebuilding her home devastated by Superstorm Sandy, following the rules has led to a flood insurance charge of more than 300 percent above the average.

First, let’s review what the Federal Emergency Management Agency promotes as how inexperience flood insurance can be. On FEMA's website (click here) under FloodSmart.gov, the agency says some homeowners may qualify for a low-risk policy for as little as $129 premium for home and contents. That provides $20,000 building coverage and $8,000 content. On that same page FEMA says the average flood insurance policy costs $650 a year. That sort of underscores what some residents in Midland Beach, Staten Island, N.Y., are finding when they get their flood insurance bill: the rhetoric does not meet reality.

Case in point: a neighbor who lost her home to Superstorm Sandy. Gerri had to tear down the house and rebuild from scratch, a two-family home that she said is being built back better than what she had. That includes eight blow-out screens for the flood exposed level and the upper floor that exceeds FEMA's requirement of three feet above flood stage for the lowest rate.

To her surprise, when she received her flood insurance quote, the price she thought she would pay — a reasonable $660 a year — instead came in at an astonishing $3,000. Flabbergasted and angry, she sought an explanation. The Write Your Own carrier servicing the policy told her that the home was not built high enough — which she said her engineer disputes.

The home, which has cost substantially more than the Small Business Administration lent her, and required additional mortgaging from a bank, is nearing the end of construction. But before the contractors can finish she needs to pay them and that requires one last installment from the bank. Her dilemma is the bank will not release the funds until she has the flood insurance certificate. And she cannot get the certificate today until she pays the unreasonable rate FEMA is charging. Until this situation is resolved she is stuck.

Gerri said she has gone to a new agent who is working to get her the rate she said she should pay. However, she is encountering another hold-up. FEMA is scheduled to release new guidelines for the insurance program. Until those guidelines are released sometime in April no agents want to obtain a quote.

"We followed everything by the book," she said. "It's all nonsense."

Have a similar story? Contact me at enquiz2001@gmail.com.