Fairfield residents whose homes weren't damaged by flooding from Superstorm Sandy last fall nonetheless will be affected by fallout from the devastating storm.
"Financially, this is going to be very significant to a lot of homeowners who never saw it coming," Jonathan Turk, a sales executive with William Pitt Insurance Services in Stamford, said after Tuesday night's Federal Emergency Management Agency forum on flood insurance in Fairfield Ludlowe High School. "I think [U.S. Rep.] Jim Himes' office is going to get an earful about this, and all the congressmen."
"The financial impact this is going to have on society is unbelievable," Turk said.
More than 50 people attended FEMA's three-hour forum on changes to its National Flood Insurance Program that were prompted by significant coastal storms over the past several years. Flood zones were expanded on new FEMA maps and base flood elevations were raised, meaning homes that were FEMA-compliant before the changes may not be FEMA-compliant now.
Also, the subsidy that was provided to residents who own older homes that were compliant when they were built is being phased out, said Bob Desaulniers, a regional insurance specialist with FEMA. Residents who own their homes outright and who live in a high-hazard flood zone will be required to have flood insurance when they sell their homes or get a loan from the equity in their homes, Desaulniers said.
The phase-out of subsidies initially applies to owners of non-primary/secondary homes and commercial properties in a Special Flood Hazard Area, as well as residents whose homes have had severe or repeated flooding. Their rates will increase 25 percent a year until the rates reflect true risk, Desaulniers said.
Residents who own primary homes in a Special Flood Hazard Area can keep the subsidized rates until they sell their homes, allow their existing policies to lapse, have severe and repeated losses due to flooding or purchase a new flood insurance policy.
But next year, the phase-out of discounted and grandfathered rates is scheduled to apply to most other homes, with premiums increasing 20 percent a year until the rates reflect true risk, Desaulniers said.
Desaulniers said it is important for homeowners to first determine what flood zone they are in. Fairfield's Zoning Department has maps that outline the local flood zones. He said increases in flood insurance premiums are not designed to close a deficit from claims in past storms, but to cover future losses.
Joseph Bienkowski, the town's coastal planner, told the Fairfield Citizen before the forum that FEMA elevations for homes near the water rose from one to four feet, depending on what flood zone they are in. He said 32 homes have been elevated so far and another 15 to 20 are "in the immediate pipeline."
"I think before we're all through, we'll have another 50 lifted in the next two years," Bienkowski said.
Raising a home to comply with FEMA's new elevations is required if the home sustained damage that exceeds 50 percent of the home's value. But some homeowners are voluntarily raising their homes to the new FEMA elevations even if that 50 percent threshold wasn't reached, Bienkowski said.
FEMA's new elevations are based off a 100-year storm, or a storm that has a 1 percent chance of occurring every year. Flooding from Sandy was below a 100-year storm, FEMA officials said.
Residents who are not in a high-risk flood zone could have the start point of the elevation raised if they moved equipment out of their basements, Desaulniers said. He said those residents should check with their insurance agents first to determine if they could receive lower flood insurance premiums by doing that. Flood insurance is provided by the federal government but is administered by local insurance agents.
First Selectman Michael Tetreau said the difference in flood insurance premiums for a FEMA-compliant house and non-FEMA compliant house is dramatic. "The federal government wants all homes to be FEMA compliant, and you will pay a real price if your home isn't," he said of changes made to the flood insurance program.
Assistant Town Planner James Wendt said grant money is available from FEMA to assist homeowners in the cost of raising their homes and that the town is accepting applications for that grant money. But he said only $9 million is available for homes throughout the state.
Wendt said the grant money is designed for "pre-emptive elevations" that "mitigate against future losses" as opposed to mandatory elevations caused by flood damage. He said the grant would partially reimburse homeowners who elevated their homes at least a foot above FEMA's base flood elevation and would reimburse up to 75 percent of the cost.
In addition to higher flood insurance premiums, FEMA's new maps and flood elevations also have an impact on property value because a potential buyer will consider the cost of flood insurance when making an offer, Turk said.
Sandy forced many people to move off the beach. Bienkowski told the Citizen developers have been buying properties at the beach, and Tetreau said he recently toured the neighborhood by Fairfield Beach and that it is "heartbreaking how many people can't move back in."
"It's really changing the whole character of our beach area. That's the lasting legacy of Sandy," Tetreau said.
The changes to the National Flood Insurance Program were the result of a law passed by Congress in 2012, known as the Biggert Waters Flood Insurance Reform Act, that was intended to make the program sustainable and financially sound over the long term.