THE $64,000 FLOOD INSURANCE BILL

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1 THE $64,000 FLOOD INSURANCE BILL GEORGIA ASSOCIATION OF FLOODPLAIN MANAGERS 9 TH ANNUAL TECHNICAL CONFERENCE Patrick Gervais, PE, CFM

2 A CASE STUDY IN FLOOD INSURANCE This is a true story that happened to a couple in Georgia Confluence of factors which resulted in an astronomical insurance bill Case study on a worse case insurance scenario for a homeowner Will we see more of these? How do we avoid or deal with these kinds of scenarios?

3 THE HOMEOWNERS Elderly, retired couple. Husband is a veteran. The couple have two sons, both senior lawyers in prominent law firms. 13 year old house on a hill (about 14 feet above the creek). Home value in excess of $500,000.

4 Construction The builder used the old paper FIRMs (June 18, 1990) Assured them that the structure was outside of the floodplain FIRM Conversion In 2007, the FIRM was updated as a digital conversion The conversion shifted the SFHA boundary 3 feet onto the corner of the structure. Re finance In 2013, the homeowners went to re finance their home to take advantage of low re finance interest rates. The Bank requested a re assessment of flood hazard. A surveyor prepared an elevation certificate and a LOMA application Problem Identified Insurance Rate Adjustment The bank immediately required the homeowners to purchase flood insurance. $64,000 insurance premium. Start paying within 6 months.

5 HOW COULD THIS HAPPEN? The re financing application revealed an error in the flood hazard mapping. The effective flood zone is Zone AE, and the base flood elevation at the property on the 2007 FIRM was approximately feet. New LiDAR survey data indicated that the ground elevation at that location is 976. The 2007 FIRM showed the house 24 feet underwater. New countywide mapping that was being prepared by the County s consultant (CH2M HILL) indicated that the structure should be outside of the SFHA.

6 993 Historic FIRM road Shifted off of aerial road BFE changed from 996 to 997 feet BFE changed from 1000 to 1001 feet

7 Channel invert = +/ feet LAG = +/ feet 1001 BFE = +/ feet 989 BFE is 23.8 feet above LAG 1005

8 993 Edge of AE Zone crosses over channel House Location 1001 Effective centerline mis aligned with channel 989 Waterfalls 1005

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10 THE SOLUTION LOMA was not an option because the map showed the finished floor far below the effective elevation. Updated mapping was completed for this area, but not the entire watershed. A FEMA revision for the entire watershed would take months, if not years A LOMR using the latest mapping data was the only way to solve this problem. Luckily the study data was already available. The County decided that a LOMR was justifiable as there was clearly a significant error in the mapping, and the revision would help many homeowners in that area.

11 993 Adjacent Homes Removed from SFHA LOMR Stream Centerline House Location LOMR SFHA Boundary 1005

12 THE LOMR The biggest problem with the LOMR was the tie in to the effective profile. The Guidelines and Specifications for Flood Hazard Mapping Partners specify that tie ins to the effective profile must be within 0.5 feet at the upstream and downstream ends of the revised reach. In order to achieve an adequate tie in, the LOMR had to extend 1.6 miles downstream to the County line, and 4.3 miles upstream. This made it a multi panel LOMR, which FEMA will usually treat as a Physical Map Revision (PMR). PMRs are usually put on the shelf until funding becomes available, which might have been months or years. At this point, CH2M HILL advised the homeowners to request assistance from their congressman to ask FEMA to process the case as a LOMR and expedite if possible.

13 House Location Effective BFE = feet Revised BFE = feet waterfalls LOMR 1% Annual Chance flood LOMR streambed

14 RE STUDY The CH2M HILL study updated the flow rates using the USGS regional regression equations. FEMA reviewer required more detailed analysis because of the large number of reservoirs in this area. The LOMR was based on the effective flows as there was no time to develop a new rainfall runoff hydrology model (there are no stream gages in that area) The State is currently evaluation a restudy of the larger watershed that this case occurred in. The County s modeling will be incorporated into that effort. CH2M HILL has developed a new HEC HMS hydrology model that will change the flows. This area will be re studied and will replace the LOMR, potentially putting the structure back in the SFHA. Even if this occurs, the insurance burden will be manageable.

15 THE END OF THE STORY The lawyers were able to convince the insurance company to hold of on the premiums when they had the LOMR document that was issued in August 2013 (effective January 2014). Written acceptance of the LOMR mapping was not obtained by all of the affected homeowners, therefore the LOMR went through it s 90 day appeal period. The insurance requirement was dropped when the LOMR went effective.

16 WILL WE SEE MORE OF THESE? It depends on how quickly re study efforts progress Removal of subsidies through BW12 will lead to higher insurance bills Insurance companies may set higher rates in some States (Florida) It could happen in coastal areas after big disasters (example Katrina) Avoiding these problems depends on identifying errors in old maps.

17 LESSONS LEARNED Errors this significant in flood mapping are unusual but there have been similar busts in mapping identified elsewhere. The Biggert Waters act of 2012 may have had a role in the high flood insurance premium in this case. This is a textbook case of where the BW12 legislation might backfire, as it assumes that the mapping is correct everywhere. Floodplain managers are encouraged to look for these kinds of problems in their effective data to avoid a similar situation. Review preliminary data carefully! If GIS flood hazard and terrain data are available for your county, there are GIS techniques that could quickly identify these area. CH2M HILL also has a modeling tool (ISIS) that rapidly identifies potentially flood prone areas without the need for a full study.