Typically, the Note from the Chair ends our newsletter. However, in these unprecedented times, we want you to know we are here for you. In our last newsletter, I ended with the sentence “In 2020, we will continue to join with partners and formulate solutions for our flooding pandemic.” Little did we know that a new pandemic would be reaching our communities.
The MCC is dedicated to helping our members during this difficult time with information on how to help with flood insurance cost, reducing risk and solutions to our communities flooding concerns. But more importantly, this newsletters theme is Focused on Awareness. While our focus as a nation is on COVID-19, we need to understand that floods do not care where our focus lies, and our understanding on preparedness is paramount.
April is financial preparedness month, and doing small things like setting extra funds aside for an emergency and checking our insurance coverages can make a big difference in our risk tolerance. You’ll read this quarter all about what you should do to be prepared for a flood during COVID-19 and how the NFIP is responding as well. Work with us to get the word out that we should make sure our nations awareness of risk is still present while our awareness to our health is most important.
Joe Rossi Chair and Executive Director Massachusetts Coastal Coalition
Know Flood Newscast: Official Podcast of the MCC
Have you listened to our Podcast recently? The MCC releases one podcast a month called the Know Flood Newscast. We take relevant topics in the news and from our newsletter and discuss them with national and local experts. Here are some recent and planned podcasts:
-Know Flood Newscast Q1 Episode 4 2020: Joe and Tim talk to underwriter and overall private flood expert Nick Lamparelli from reThought Insurance. Our wide ranging interview is somewhat technical but captivating, as we outline what’s going on with private flood insurance, what the future of flood insurance looks like, and what, if any, role does the NFIP play in the future.
-Know Flood Newscast Q4 Episode 3 2019: Listen as Tim and Joe discuss what the MCC did in 2019 and what 2020 may look like. Then, listen in as we have a discussion with Harriet Festing of Higher Ground, the largest flood advocacy group in the country.
COMING SOON -Joe and Tim talk to Chris Heidrick, from Heidrick & Company Insurance and Risk Management Services, LLC and past Chair and member of the Flood Insurance Producers National Committee. Chris talks all about the NFIP, private flood and gives a great perspective of legislative changes and how they could work with (or not) risk rating 2.0.
Floods are the most common natural disaster in the United States. The Pew Charitable Trust recently reported that nearly half of U.S. states are expected to experience significant flood events during the spring of 2020. In just the past few years, major flood disasters such as Hurricanes Harvey, Irma, Florence, and flood events in the Midwest have exhausted many response resources.
Now, with the COVID-19 outbreak the world faces an unprecedented threat to human health and safety. COVID-19, like any disaster, also threatens our economic well-being, as unemployment soars and an effective vaccine could be months, even years away. As a result, people who live in flood-prone areas must now consider the very real possibility of facing multiple and concurrent disasters.
Digital Outreaches -New maps (for Marshfield)- On May 29th, the MCC will be holding a digital map outreach in preparation for the new Marshfield flood maps that become effective on 7/6/2020. Registration is required, and this free digital outreach will be for information only. Questions can be submitted ahead of time by emailing us at info@knowflood.org -When: May 29th, 2020 -Where: Register here
-Flood Insurance Risk Awareness- With COVID-19 taking most of our bandwidth, the MCC wants to remind stakeholders on what they can do to reduce their risk. Join Chair Joe Rossi and other experts as we discuss risk awareness during COVID-19. Registration is required. -When: June 19th , 2020 -Where: Register here
-Questions on CRS and other flood premiums- Join the MCC on Facebook Live as we review what the recent changes to Marshfield CRS mean, and other ways to reduce premiums (including private flood). -When: May 22nd, 2020 -Where: MCC Facebook page
FEMA Changes During COVID-19
During COVID-19, FEMA has made some changes to the NFIP and its operation to help policyholders and other industry professionals. Below are those changes:
-NFIP Extends Grace Period: In light of the financial hardship policy holders may face in the coming months due to the COVID-19 crisis, the National Flood Insurance Program (NFIP) has extended the premium payment grace period from 30 to 120 days. Property owners with NFIP flood policies normally have a 30-day grace period after the policy expiration date to pay their premium in full and avoid a lapse in coverage.
If a policy has an expiration date between February 13, 2020 and June 15, 2020, then the NFIP must receive the renewal premium within 120 days of the expiration date to avoid a lapse in coverage. Likewise, if a policyholder receives an underpayment notice dated between February 13, 2020, and June 15, 2020, then the NFIP must receive the additional premium amount requested within 120 days of the date of the notice.
NFIP outlines responsibilities for remote claims handling: To protect the health and safety of NFIP policyholders and NFIP adjusters during this pandemic, the NFIP has created guidelines to remotely handle claims. Many insurers and claims companies already have ways to digitally handle claims that can be used in this time. If a claim is handled remotely, the adjuster must ensure that they perform the same tasks as a normal claim remotely, ensuring data security, and other safe digital practices.
Some claims cannot be handled remotely for a multitude of reasons, and when that happens, the adjuster must closely monitor the public health situation so if an inspection is delayed, it can be made at the earliest possible time;
Overall, the policyholders still have the following rights: • _Request an additional payment by providing actual receipts or other documentation showing an increased cost to repair covered flood damage. • _Request a physical inspection once shelter in place is lifted. • _Formally appeal any full or partial denial of a claim. • _Bring a lawsuit in the United States District Court encompassing the insured property within one year of the date all or any part of the claim is denied.
FEMA suspends the issuance of any new Letters of Final Determination: FEMA has temporarily suspended the issuance of new Letters of Final Determination (LFDs) and Letters of Map Revision through April 30th. This does not affect LOMAs, or any LFDs already issued. Because an LFD is issued six months prior to new map effective dates, no new flood maps will go effective at least through October.
Sue Sullivan is a top producing realtor for 15 years with Coldwell Banker in Scituate and is ranked as the top 15% of Coldwell Banker professionals worldwide for production and exceptional service. Susan became part of the MCC Board of Directors in 2016 to bring her expertise in real estate.
Sue’s Flood Real Estate Tips Be Aware of Substantial Improvement Triggers
The unpredictable and unprecedented events have certainly taught us all how quickly life can drastically change. We have been provided guidelines and tools from the most experienced medical and scientific professionals in order to remain safe and healthy. We heed their advice to the very best of our abilities in order to protect ourselves, our families, and our communities from a potentially devastating outcome.
In many ways the circumstances and urgency caused by the corona virus parallel the devastating and catastrophic effects that can occur from the natural disaster of flooding. The potential for loss of life, property and prosperity are all outcomes that have occurred when the advice of the experts is taken lightly or ignored completely. MCC is here to educate and advise our communities. Please seek us out, we are here to help.
I will provide a brief summary of the current MA real estate environment. Mid-March to mid-April the market essentially came to a halt. We struggled at first with our most basic procedures while adhering to strict safely guidelines. As an industry we rapidly adapted to virtual showings, open houses, client meetings and closings. We educated our clients, we behaved responsibly and we helped people move forward. As a result I am thrilled to say in the past two weeks the market has significantly improved. We are transacting at approximately 65% from this time period last year. People need and want to move. We are “safely” assisting our clients through this process.
Do your part to “Stay home” We’ll do our part to “Get you home” I truly hope this message finds you and your loved ones in good health.
April 1st 2020 Program Changes
This past April first, as reported in our Q4 2019 newsletter, NFIP rates increased. Overall, premiums increased an average of 11.3 percent. On average, the total amount billed to the policyholder will increase from $993 to $1,092.
SRL Premium: FEMA increased the Severe Repetitive Loss (SRL) Premium for all SRL policies from 5% to 10%
Reserve Fund Assessment: FEMA increased the reserve fund assessment from 15% to 18% starting April 1st 2020.
All sections of the new flood insurance manual can be found HERE
October 1st 2020 Program Changes As of the publication of this newsletter, the October 1st changes have not been published by FEMA.
OFIA report is released The Federal Emergency Management Agency’s Office of the Flood Insurance Advocate (OFIA), an independent office within the Federal Insurance and Mitigation Administration at FEMA, has released its 2019 Annual Report highlighting complex issues NFIP policyholders and property owners face navigating the program.
The complex issues identified through OFIA’s casework present opportunities to improve the program’s overall customer experience. As a voice for the customer, the OFIA presents recommendations it believes brings a resolution to these issues. The recommendations are addressed for action by the Program to ultimately improve it for current and future policyholders and property owners. In its 2019 Report, the OFIA identified five systemic areas of customer frustration related to the NFIP:
Improper Application of Elevation Rating Using an Elevation Certificate (EC): Policyholders feel they have been treated unfairly when an EC was submitted to an insurer, and that EC was applied much later to rate the policy, resulting in the overpayment of premiums for several years.
Loss of Rating Discounts Following a Lapse in Coverage: Policyholders are frustrated when a third party, such as a lender, causes a lapse in coverage by not paying the flood insurance premium on time, resulting in the loss of rating discounts.
Confusion Regarding Group Flood Insurance Coverage: Property owners who are issued coverage under the Group Flood Insurance Policy (GFIP) are frustrated when they experience a subsequent flood within the three-year policy term that is not covered.
Limited Refunds After Receiving a Letter of Map Amendment, Out as Shown: Policyholders find it unfair when there are no refunds for terms prior to the effective date of a Letter of Map Amendment (LOMA) that shows their property is “Out as Shown” (OAS).
Denial of Increased Cost of Compliance (ICC) Funds When Permits are Issued before Substantial Damage Letters: Policyholders are frustrated when they are denied ICC claims because the community made a substantial damage declaration after a permit requiring flood mitigation was already issued.
Tim Carty owns MurphyCarty Insurance Agency, located in Scituate Harbor. His objective is to support policy holders, minimize their risk, and help navigate them through the flood program. Tim has an MBA from Boston University and an undergraduate from Babson College.
Tim’s Flood Savings Tips Let’s Make A DEAL
“Let’s make a DEAL.” “Such a deal.” “What is the deal?” It is true: everyone wants a deal. But how can there be a “deal” with flood insurance? This perception is that flood insurance is expensive. But a deal might just exist for many of us without even realizing it. Let me explain.
Experts estimate that flooding events will affect 25 of our 50 states this year alone. And flooding does not mean coastal flooding only: we know that rivers can overflow their banks and oceans surge, but 7” of rain in a 24-hour period constitutes a 1% flooding event. Occurrences of severe downpours, even deluges, are becoming more commonplace. They are difficult to anticipate because water accumulation is coming from the sky, not from a known body of water or river where a sense of high-water might exist in a homeowner’s mind. Flooding from rain affects an immediate area as well as downstream areas. Flood anticipation and preparation is much more difficult to even contemplate when it cannot be seen.
Other ways to view flooding: -We have all seen images of homes and autos underwater “someplace else.” -Recent Texas hurricanes brought over 30” or rain in 24-hour periods to some areas. -Hurricane Sandy brought salt water inland over one mile in some areas of New Jersey. -In the last 200 years, there have been exactly 200 coastal storms affecting New England with storm surges between 13.37 and 16.12 feet. -On average, a significant storm is within striking distance of The Blizzard of ’78 (surge height: 16.12 feet.) once a year… Historically, 25-30% of all flooding occurs in low risk flood zones.
“I get it – serious flooding can happen anywhere. So where’s the deal, Tim? What about the deal?” The deal is for all homeowners who are not in a high risk flood zone but are proximate to one. If you border or are near a high risk flood zone, or are in a low risk flood zone, there are inexpensive flood policies offered by FEMA called Preferred Risk Policies (aka PRP’s.) This is the deal. For hundreds of dollars you can save yourself tens or hundreds of thousands of dollars if an overflow from a nearby flood zone occurs – or if a flood occurs in your immediate area. (25-30% of all flooding occurs in low risk flood zones.) Why, you might even be able to pay for your flood policy with a simple increase in your homeowner’s deductible. (Do, however, check with your agent about this as a first step.) Think of your “deal” as protection you can give yourself for your home. Maybe it has a special feature: waterfront, water view, etc. These features add value and enjoyment to your home 99% of the time. But for that possible 1% where that feature might turn against you, or the unforeseen could happen, you can be smart for very little money. Your home is a lifetime investment –cover yourself.
It is sensible to consider a PRP flood policy. Remember, 25-30% of all flooding occurs in low risk flood zones. Be smart and do not walk away from a FEMA-backed preferred policy. Besides, you can tell your friends and neighbors about how smart you are being prepared for a “rainy day.”
