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Romano: Why flood insurance might not be enough to save your home

By John Romano
MONICA HERNDON | Times Justin Lyons' room in his Valrico house that was flooded following Hurricane Irma on September 20, 2017. Lyons lives near the Alafia River and had to evacuate his home about a week before, in the middle of the night, as the waters rose. Lyons has been staying at the house because he doesn't want his family's remaining belongings to be stolen.

Irma is gone, and Maria never came.

And yet this is as good a time as any to worry.

Because if recent storms have taught us anything, it is that Tampa Bay homeowners are at risk not just from flooding but from the regulatory hurdles that inevitably follow.

They’re learning that today in Jacksonville. And in Miami. And in every other community that saw floodwaters rise as Irma cut a path through the middle of the state last month.

You see, having a policy from the National Flood Insurance Program is essential, but it’s no Get-Out-Of-Hell free card. Not with relatively new government regulations meant to cut down on NFIP losses.

And if you have a hard time digesting that, then you might want to read a report released this month in conjunction with the fifth anniversary of Hurricane Sandy. The New Jersey Resource Project surveyed hundreds of residents whose homes were damaged in 2012 and are still without resolution.

The result is "The Long Road Home," a 56-page study advocating for NFIP reforms by detailing the stories of homeowners caught in bureaucratic limbo.

"It was the worst, it was awful,’’ said Amanda Devecka-Rinear, one of the report’s authors. "When we showed up at their doors, they were so glad that somebody cared and was willing to listen, but it was heartbreaking to see what had happened to their lives.

"There was layer after layer of failure that was just devastating. And what makes it worse is that we know what happened to us up here, and when we see the storms coming toward you all, our hearts break because we know what everybody is going to be facing.’’

So what are we talking about here?

Well-meaning regulations that can lead to life-altering realities.

Concerned about homes with repetitive flood losses, FEMA decided not to write NFIP policies in communities that did not pass laws that enforced stricter flood mitigation plans. And so local governments had no choice but to follow those FEMA guidelines.

And that means if your home is considered "substantially damaged’’ (an insurance claim of more than 50 percent of the structure’s value) then you need to raise your home’s elevation before you will be issued permits to begin repairs.

For example:

Let’s say you have a $150,000 home in a low-lying area. A flood causes $80,000 in damage. You have an NFIP policy, so you think you’re in the clear. Except, because you now fall under the substantially damaged category, the house must be raised 11 feet above the flood baseline.

In a worst-case scenario, for a concrete slab home, that type of elevation project could cost as much as $160,000. In other words, twice as much money as the actual damages. For some people, it’s easier to simply tear the home down and start over at a higher elevation. For others, abandoning the house is the only solution.

"If we have a catastrophic flooding event, a great majority of St. Petersburg is going to be in a lot of trouble,’’ said Noah Taylor, the city’s flooding expert. "That’s why the quicker we continue mitigation efforts, whether that’s tearing them down or elevating them, the safer everyone will be.’’

Making sure houses are elevation-compliant is not the only obstacle residents face in the wake of a flood event.

Of the homeowners who responded to the New Jersey Resource Project, just about half (48 percent) said their homes had reported damages of more than $150,000. And yet only 5 percent actually got payouts of more than $150,000.

How can that be?

Devecka-Rinear said private insurers who administer NFIP policies can face government fees if they overestimate damage costs. Invariably, that leads to underestimating damage costs.

She said the problem was so rampant in New Jersey that elected officials forced FEMA to reopen tens of thousands of claims to make sure homeowners got what they deserved.

"The NFIP, in our humble opinion, needs to be overhauled,’’ she said. "States like ours and yours, that have survived these disaster and flood events, need to band together and push for reforms.’’

About 40,000 homeowners in New Jersey suffered flood losses from Sandy this week in 2012. Exact numbers are hard to come by, but Devecka-Rinear said an estimated 20 to 30 percent of those homeowners are still not back in their homes.

That would be 10,000 families.

Five years later.

Worry, much?