FEMA Delays Rate Increases On "Grandfathered" Properties

Grandfathered rates were scheduled to increase beginning in October

By Steve Moran

The Federal Emergency Management Agency has announced it will delay flood insurance rate increases on properties that have been “grandfathered” for as much as two years. 

Grandfathered properties are those that have had continuous policies that were in effect prior to the recent post-Sandy elevation and zone changes to the agency’s flood maps used in determining the premiums set by the National Flood Insurance Program (NFIP). 

Congressman Steven Palazzo, R-Biloxi, who co-wrote the provision, said in a statement that it could set the agency back as much as two additional years in implementing drastic rate increases on homeowners with grandfathered policies.

"This change could have a positive impact on approximately 200 full-time residents and their families in Stafford," said Township Administrator James Moran.

"It gives them a reprieve from much higher premiums and allows them to catch their breath, as it were, while still recovering from Sandy," he added. 

Prior to the announcement, grandfathered rates were scheduled to increase beginning in October. 

Properties that change ownership, experienced “substantial damage” recently and second homes do not qualify as grandfathered.  "Substantial damage" in most cases means a home sustained more than 50% of its assessed value in damage from Sandy or other causes.

Much of Stafford Township's bay and lagoon front areas like Beach Haven West and Mallard Island saw their flood zones and base elevations upgraded when FEMA issued new Base Flood Elevation (BFE) maps last year.

The township was able to appeal many of the changes, but not all.

This week's change in policy was due to FEMA's response Thursday to a provision in the recently enacted Congressional spending bill that bars FEMA from spending funds for the remainder of the 2014 fiscal year to implement a provision of the 2012 Biggert-Waters Act regarding these properties. 

The Biggert-Waters Act was an overhaul of the NFIP and called for the subsidized premiums to increase by 20% per year for next five years to bring them on a parallel with the open market and ending the subsidies. The increases began in with policies renewed after October of 2013. 

The annual saving on the premiums could be as much as thousands of dollars at time of renewal. according to Keith Taege, vice-president of the Insurance Agency Connection at the Van Dyk Group with offices in Barnegat, Manahawkin and on Long Beach Island. 

"I feel sorry for those who already complied with new guidelines feeling it was their only choice if they wanted to remain in their homes," he added.

However, he said this delay in increases to grandfathered properties is really going to the people who need it the most. "These are people that have lived in their homes for years and years and want to stay here," he said.

By not having to comply immediately with any new flood maps guidelines and be able to pay their current rates represents a major saving for them at this point, said Taege.

Taege added he hoped that the recent bill passed in the Senate to delay all increases for up to fours years will soon become law.

"People have to understand those who live at the shore, work at the shore. They provide jobs, goods and services to the rest of the country. Where would a tourist industry be if the people who work here can't afford to live here?," he said.

House Republicans blocked two attempts this week by Democrats to “fast track” a vote on the recently past Senate bill placing a moratorium on all flood insurance rates increases. 

Earlier this week in a bi-partisan vote of 67-32, the Senate passed a bill calling for a delay of up to four years for all rate increases as FEMA conducted a feasibility study on the increases and finalized the new flood elevation maps currently being implemented. 

On Tuesday, a motion, known as "strike the last word," would have allowed Democrats to modify a rule and add amendments to a pending wildlife bill was defeated. It would have allowed an attempt to add the Senate-passed flood insurance bill to the wildlife measure.

The motion failed by a vote of 225-193 with all Democrats and one Republican voting for the motion.

On Wednesday, Democrats called for a “No” vote on a motion "to raise the previous question." If the motion was defeated, it would have allowed debate on two pending bills to continue, with the possibility of adding an amendment such as the Senate-passed flood control bill.

That attempted also failed by a vote of 226-196, mostly along party lines, meaning no amendments could be added to two bills currently on the floor.
For more information on the “grandfather” clause. Visit the FEMA web site at:


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