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Why the flood fix needs fixing

By Jay MacDonald · Bankrate.com
Friday, March 7, 2014
Posted: 6 am ET

The public outcry over skyrocketing flood insurance rates that resulted from the well-intended but deeply flawed Biggert-Waters Flood Insurance Reform Act has largely been confined to gobsmacked coastal homeowners who saw the subsidized premiums on their vintage homes jump tenfold or twentyfold overnight.

Conspicuously absent in the uproar have been the nation's hundreds of thousands of coastal condo owners. Surely their flood rates have exploded as well, right?

Wrong. It turns out major condominium developments have sufficient clout to dispute -- and sometimes rewrite -- the flood maps that the Federal Emergency Management Agency uses to jack up homeowner rates, thus saving thousands of dollars for their Del Boca Vista residents. ("Seinfeld" reference, in case you're wondering.) In fact, this sort of thing has been going on for years.

Condo clout at work

The Tampa Bay Times recently reported that at least nine condo complexes in Florida's Tampa Bay area have successfully slashed their flood insurance premiums by convincing FEMA that its flood maps are just plain wrong.

One such complex, the 177-unit Land's End on Treasure Island, was originally rated by FEMA's National Flood Insurance Program, or NFIP, as being in the most hazardous "VE" zone, which seemed reasonable since the complex basically sits on the beach overlooking the Gulf of Mexico.

But when its annual flood premium approached $100,000, the condo association hired a consultant who demonstrated to FEMA that the growth of dunes and oceanfront vegetation has made Land's End a virtual fortress compared to its former, sunbathing self.

As a result, FEMA reclassified Land's End to zone "AE," a move that dropped the complex's flood insurance premium from $100,000 to about $9,000.

Association manager Cal Brummett was understandably delighted. "We're going to save $800,000 over eight years," he told the Times.

'An insane difference'

It was a similar story at Sunset Vistas, another Treasure Island waterfront condo development. When its annual flood insurance rate hit $400,000, Sunset Vistas pleaded its case to FEMA, succeeded in having the flood maps changed and walked away with an annual flood premium of less than $20,000.

"It was just an insane difference," admits Kelly Dees, a condo association officer.

Nearby homeowners would undoubtedly agree.

Even resort properties such as the Hyatt Regency Clearwater Beach have successfully petitioned for a more favorable zone.

Most flood map appeals are OK'd

FEMA estimates it gets about 30,000 requests nationwide each year for flood map revisions and approves about 90 percent of them. Nobody, including FEMA, considers the flood maps particularly accurate.

Yes, this may seem like a giveaway to the rich. But Ken Morris, president of Floodzone Revisions, a local company that helps property owners petition FEMA for reclassification, says his business is about righting a wrong that predates the Biggert-Waters flap.

"The bottom line is that perhaps many properties should have never been placed in the VE zone to begin with," he told the Times.

Let's hope the Biggert-Waters Version 2.0 legislation currently working its way through Congress mandates a comprehensive revision of those flood maps before charging an extra dime to anyone.

Follow me on Twitter: @omnisaurus.

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