Inspection date will determine insurance

By Steve Estes

Even though officials from the Federal Emergency Management Agency have agreed that the pilot inspection program for lower level enclosures is over, the ramifications of that program may continue for some properties.

Under the FEMA-mandated pilot program, homes where lower level enclosures were identified that had flood insurance, an inspection of that enclosure was required before flood insurance could be renewed. Just about half of the homes that were originally identified actually went through the inspection process, and there are about 500 homes remaining that have already received letters, are in the process and are expected to undergo an inspection.

According to the most recent letter from FEMA concerning the pilot program, the process came to an end on June 28.

FEMA stated that insurance holders who have received a letter that they need an inspection and have a flood insurance renewal date prior to June 29 are expected to finish the process. Any new policies that applied for coverage prior to June 29 are also expected to complete the inspection process.

For those that don’t, FEMA says they can reapply for flood insurance after the June 28 expiration date, but will have to obtain insurance under the current rules.

Those rules include a new elevation certificate for the home and complete photographs of the structure.

“We anticipate very few properties will fall into this category,” wrote Juhn de la Cruz, Chief, Underwriting Branch, Risk Insurance Division at FEMA.

The letter states that current policyholders who were notified they needed an inspection but had a renewal date after June 28 are not required to obtain  inspections as a requirement for insurance renewal.

There was no estimate on how many homes that might affect.

FEMA and county officials came to an agreement last month that many of the 2,800 or so homes that had been originally identified as having enclosures below base flood and didn’t enter the inspection process probably didn’t require the insurance anyway.

Some folks had paid-off mortgages, or paid off the mortgage, negating the requirement for flood insurance rather than undergo the invasive inspection procedure. Others may have purchased private flood insurance at a higher rate to negate the need for flood insurance.

Flood insurance is a requirement in Monroe County for any home loan backed by any federal agency such as FHA, VA or Fannie Mae/Freddie Mac.

Former policy holders who were told they needed an inspection but never requested one can reapply for flood coverage after June 28 but current underwriting rules will apply, including the need for new elevation certificates and complete photographs of the structures.

The letter didn’t stipulate whether any of the policies affected by these decisions would be charged at the greatly increased rates set by Congress last year.

Federal Legislators have pushed through an emergency bill that stalls those huge increases until an affordability study is completed, which many estimate will take about two years.

Without the newest bill, rates could potentially rise more than 500 percent in some cases depending on the flood zone of the property. Every property in Monroe County is in some flood zone.

The end of the pilot program doesn’t get everyone off the hook for a potential inspection in the future, however.

Monroe County still has its transfer on sale inspection program where homes with property codes indicating finished space below base flood elevation require an inspection of that space when the property changes hands. The ordinance controlling that program does not differentiate between types of transfers. It is conceivable that homes willed to younger generations, or simply deeded over to someone without payment could still be required to undergo the inspection process before a new certificate of occupancy can be issued.

According to Growth Management Director Christine Hurley, part of the agreement with FEMA is also that the county will continue to offer its Certificate of Compliance Program.

Under that program, homeowners with a lower level enclosure can voluntarily request an inspection to make sure that the enclosure meets FEMA standards. If the inspection is successful, the property will be issued a certificate that will be attached to the deed so there won’t be questions about potential legality of the enclosure when the property is sold.

“This eliminates some of the problems we have had with potential property buyers unsure of whether the enclosure was legal and wanting to avoid the issues surrounding that,” said Hurley. “We think it makes the property more valuable because the questions are removed.”

The certificate of compliance program is still in the implementation phase and planning staff is unsure if it will draw any takers once it is fully functional.

FEMA also, however, told county staff that if they found an enclosure violation in plain view while doing something else, or if the enclosure could be deemed in possible violation when viewed from the road, county code enforcement could prosecute the property if necessary.

“If our people are standing on the road,and can see and enclosure and we know that it’s not permitted for one, we can use code enforcement processes to bring the home into compliance,” said Hurley.

But she also said that the agreement with FEMA doesn’t mandate that the county take that stance.

“If people are worried that we’re going to be out driving around looking for enclosures, we don’t have the manpower or the inclination for that,” she said.

Hurley told the Board of County Commissioners last month that as the agreement has been interpreted by legal staff, “We don’t have to initiate code proceedings.”

No Comments »

Leave a Reply