Download - Executive Summary: Flood Insurance in NYC
CONFIDENTIAL 1
FEMA Flood Maps and Flood Insurance March 23, 2015
CONFIDENTIAL 2
Executive Summary: Flood Insurance in NYC
New Preliminary FEMA Flood Insurance Rate Maps (FIRMs) have been issued for New York City
• Expand floodplain and flood insurance purchase requirements significantly • Expect FIRMs to be official for insurance purposes after 2016
Federal legislation has changed FEMA’s National Flood Insurance Program removing long-standing subsidies
City is taking steps to mitigate risk
• $19.5B resiliency plan including enhancing coastal defenses • Flood insurance affordability studies
Key actions for residents: • Understand their risk and flood insurance purchase requirements • Buy flood insurance: call at least 3 agents for quotes • Consult resources for help
CONFIDENTIAL 3
Agenda
FEMA NFIP Overview
FEMA Flood Maps
FEMA Flood Insurance Reform
Key Communication Timeline and Messages
City Efforts and Next Steps
CONFIDENTIAL 4
The Biggert-Waters Act
passes
History of Flood Insurance
National Flood Insurance Program created within HUD
Great Mississippi Flood
New York City adopts its first
Flood Insurance Rate Map
Mandatory Flood Insurance
Purchase Requirement
Hurricane Katrina hits
the Gulf Coast
The Homeowner Flood Insurance
Affordability Act is passed
Hurricane Sandy hits the Northeast
1927
1968
1973
1983
2005 2014
2012
1979
FEMA established and
NFIP moved from HUD to FEMA
CONFIDENTIAL 5
FEMA’s National Flood Insurance Program
Voluntary program based on a mutual agreement between the Federal government and the local community:
In exchange for adopting and
enforcing sound floodplain management regulations and mitigating risk, Federally-backed flood insurance is made available to property owners and renters throughout the community.
CONFIDENTIAL 6
FEMA’s National Flood Insurance Program Program
Player Responsibility
Administers NFIP
Underwrites almost all
residential flood risk
Sample providers who sell
flood insurance policies and
manage claims as per
FEMA’s guidance
CONFIDENTIAL 7
Agenda
FEMA NFIP Overview
FEMA Flood Maps
FEMA Flood Insurance Reform
Key Communication Timeline and Messages
City Efforts and Next Steps
CONFIDENTIAL 8
Key functions: Shows current flood risk
Defines Special Flood Hazard Area (SFHA)
VE, AE and AO zones “100-year floodplain” with 1% annual
chance of flood (~26% chance over a 30-yr mortgage)
Determines flood insurance requirements
If you have a federally backed mortgage or received federal disaster assistance, including assistance through Build it Back
Informs building code standards
FEMA’s Flood Insurance Rate Maps (FIRMs) FEMA’s flood maps are developed as part of the National Flood Insurance Program.
CONFIDENTIAL 9
FEMA 2007 Flood Insurance Rate Maps (FIRMs)
FEMA 2007 FIRMs 100-year Floodplain
Source: FEMA
Flood Insurance Rate Maps Prior to Sandy, FEMA’s 2007 FIRMs were the best indicator of the city’s vulnerability to flooding.
100-year Floodplain*
2007 FIRMs
Residents 218,000
Jobs 214,000
Buildings 36,000
1-4 Family 26,000
Floor Area (Sq Ft.)
377M
FIRMs not significantly updated since 1983
In 2007, digitized existing paper maps, did not update accuracy
1983 maps based on outdated topography and weather data
* Numbers are rounded for clarity
CONFIDENTIAL 10
FEMA 2007 FIRMs 100-year Floodplain
Sandy Inundation Area (outside the 100-year Floodplain)
Source: FEMA
Damage outside 2007 100-year floodplain:
• > 1/3 of red- and yellow-tagged buildings
• ~ 1/2 of impacted residential units
• > 1/2 of impacted buildings
Flood Insurance Rate Maps Sandy demonstrated that New York was more vulnerable than previously thought.
FEMA 1983 FIRMs vs. Sandy Inundation Area
CONFIDENTIAL 11
100-year Floodplain*
2007 FIRMs
2013 PFIRMs
Change (%)
Residents 218,000 400,000 83%
Jobs 214,000 290,800 35%
Buildings 36,000 71,500 99%
1-4 Family 26,000 53,000 104%
Floor Area (Sq Ft.)
377M 532M 42%
FEMA 2013 Preliminary FIRMs 100-year Floodplain
FEMA 2007 FIRMs 100-year Floodplain
* Numbers are rounded for clarity
Flood Insurance Rate Maps The most recent maps, called Preliminary FIRMs, were released in December 2013 and show a floodplain that is 51% larger than previously.
FEMA 2007 FIRMs vs. Preliminary FIRMs
Homeowners with a federally-backed mortgage in the 100-year floodplain are required to buy flood insurance
Source: FEMA
CONFIDENTIAL 12
Source: FEMA
FEMA 2013 Preliminary FIRMs 100-year Floodplain
Projected 2020s 100-year Floodplain
Projected 2050s 100-year Floodplain
Source: FEMA; CUNY Institute for Sustainable Cities
* Numbers are rounded for clarity
Flood Insurance Rate Maps Given the City’s projections on sea level rise, these floodplains will extend even further by the 2020s and into the 2050s.
Projected floodplain for the 2020s and 2050s 100-year Floodplain*
2013 PFIRMs
2050s Projected
Change (%)
Residents 400,000 801,000 100%
Jobs 290,800 555,700 91%
Buildings 71,500 114,000 59%
1-4 Family 53,000 84,000 104%
Floor Area (Sq Ft.)
534M 855M 42%
CONFIDENTIAL 13
2009 - 2012 2013 2014
Comments and appeals
Final mapping
Preliminary Flood Insurance Rate Maps (FIRMs) released
FIRM adopted
Activity
FEMA conducts regional technical flood study
www.region2coastal.com
www.nyc.gov/floodmaps
Flood Insurance Rate Map Update
2015 2016
Insurance purchase requirements don’t take effect until maps are adopted
Today
CONFIDENTIAL 14
Appeals and Comments Process Public review period of Flood Insurance Rate Maps
Comments Appeals
Location of municipal boundaries Road name errors and revisions Requests to incorporate Letters of Map Change (LOMAs, LOMR-Fs and LOMRs) Other possible omissions or potential improvements to the maps
New or modified BFEs Floodplain boundaries SFHA zone designations
Accepted anytime 90-day statutory period
N/A Must be based on scientific and technical issues with FEMA methodology and mapping Must contain supporting data and documentation
Timing
Requirements
What submissions can address
CONFIDENTIAL 15
Agenda
FEMA NFIP Overview
FEMA Flood Maps
FEMA Flood Insurance Reform
Key Communication Timeline and Messages
City Efforts and Next Steps
CONFIDENTIAL 16
NFIP Challenges • Pre-Sandy, NFIP was $18B
in debt to Treasury ($16B from Katrina)
• Expected Sandy payouts are $12-15B
• Subsidized rates do not adequately reflect actual flood risk
July 2012: Biggert-Waters Flood Insurance Reform Act
• Prohibit premium subsidies
on new or lapsed policies
• Phase out subsidies for all policies
• Require banks to enforce purchase requirements more vigorously
• Analyze affordability impacts by April 2013
National Flood Insurance Program Reform The NFIP has undergone significant regulatory change over the last two years.
March 2014: Homeowner Flood Insurance Affordability Act
• Repeals trigger for new or
lapsed policies
• Caps rate increases at 18% annually (some exceptions)
• Enables newly mapped properties to purchase preferred risk rate for 1 year
• Authorizes additional funds for affordability study
• Provides refunds for certain policies affected by BW-12
CONFIDENTIAL 17
$493 $581
$685 Newly
Mapped Current
Rate
National Flood Insurance Program Reform NFIP Grandfathering for newly mapped • When new maps become effective, current
subsidized rates will increase 18% per year upon renewal (does not include new fees)
• Increases continue until premiums reach projected Full Risk Rating X-zone rate
Projected Rate Cap
$452
$2,640
12 years
X Zone/A Zone With basement
$808
CONFIDENTIAL 18
$493 $581
$685 Current
Rate
Projected Rate Cap
$452
$2,640
12 years $493
$581 $685
Newly
Mapped
Rate
$452
$7,800
17 years
PRP purchased before maps adopted – grandfathered as “X” zone
Policy Purchased after maps adopted, Newly Mapped in A Zone
National Flood Insurance Program Reform Due to grandfathering, for those outside the current SFHA, benefit to purchasing a flood policy before new maps are officially adopted.
Newly
Mapped
* Policy for X Zone rated, with basement in AE zone
Projected Rate Cap
Rate cap will depend on structure elevation
CONFIDENTIAL 19
National Flood Insurance Program Reform Rates increase based on building height relative to expected flood height. Home elevation will reduce risk and premiums.
Rising Tides, Rising Costs, CNYCN
CONFIDENTIAL 20
NFIP Surcharges and Fees
Effective April 1, 2015 Policyholders must provide
proof their property is a primary residence to avoid
excessive surcharges
CONFIDENTIAL 21
Agenda
FEMA NFIP Overview
FEMA Flood Maps
FEMA Flood Insurance Reform
Key Communication Timeline and Messages
City Efforts and Next Steps
CONFIDENTIAL 22
Technical appeals period is coming
Outreach Timeline Q4 2014 – 2017
Key Message
Dec 2014 July 2015 April 2015 Today 2017?
90-day statutory appeals period
Final mapping
FEMA flood maps are changing
You should buy flood insurance
You are legally required to buy flood insurance
Flood risk is increasing
1. Community Coordination and Outreach (CCO) Meeting
City-led initiatives
Maps become official FEMA-led initiatives
CONFIDENTIAL 23
Key Actions for Property Owners
Understand your risk and flood insurance purchase requirements
• Identify your property’s flood zone designation on FEMA’s Flood Insurance Rate Maps
• Even if you live 2 miles away from the coast you could be at risk of flooding
Buy Flood Insurance
• Call at least 3 agents listed on floodsmart.gov for quotes
• Homeowners insurance does not cover damage from floods and federal assistance is not guaranteed in the event of a flood
For help, consult the following resources:
• Flood risk information and address lookup: FloodHelpNY.org
• Flood insurance agent lookup: floodsmart.gov
• FEMA Map questions: 1-877-FEMA MAP (1-877-336-2627)
• FEMA Flood Insurance agent referral: 1-888-435-6637
CONFIDENTIAL 24
FloodHelpNY.org
CONFIDENTIAL 25
Agenda
FEMA NFIP Overview
FEMA Flood Maps
FEMA Flood Insurance Reform
Key Actions for Property Owners
City Efforts and Next Steps
CONFIDENTIAL 26
FEMA, OEM
Reduce risk • City’s $19.5 Billion plan lays out 257 initiatives to strengthen coastal defenses, improve
buildings, protect infrastructure and make neighborhoods safer and more vibrant Improve risk-based pricing • Neighborhood: Army Corps and FEMA do not always agree on flood protection benefits • Household: 40% of City’s buildings cannot be elevated; exploring alternative mitigation
strategies • “Pre-FIRM” construction: Need updated rate-setting methodology for old building stock
(focus of the Negatively-Rated Building Study being conducted by the National Academy) Launch affordability studies • Launching two studies assess affordability impacts and potential solutions for multifamily
and 1-4 family homes
Inform the public • Launching public education campaign regarding risks, mitigation and flood coverage
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2
3
4
City Efforts and Next Steps City is taking steps to reduce risk and increase understanding of its exposure.
CONFIDENTIAL 27
nyc.gov/resiliency @Planyc