Friday, May 31, 2013

INFO CENTRAL PRESENTS: Insurance for the Barrier Islands with Nat Italiano

In July of 2012 a piece of legislation was passed designed to improve the stability of the National Flood Insurance Program (NFIP) by changing the way it is run. The legislation is being implemented over time, and big changes to flood insurance policies are on the way.

On May 29th, Nat Italiano of Italiano Insurance (Boca Grande) spoke with about 30 Islanders about the impact these changes will have. 

These changes are complicated. The information below is a summary of what was presented to us. However, do not depend on this summary as the sole source of your information. To fully understand these changes, you will want to speak with your insurance representative. 


“SUBSIDIZED” RATES

For Island homeowners, the most immediate changes will impact single-family homeowners with structures built before 1974, the year that Charlotte County adopted its first Flood Insurance Rate Map (FIRM). These homes are considered “Pre-FIRM” and your rates are “subsidized”, meaning you are paying a rate that is lower than your actual risk.

If you have a pre-FIRM home and it is your primary residence, you will be able to keep your subsidized rate as long as you have continuous coverage, until you sell your home. At that time, the rate will jump to full risk for the new owners. Conventional rate increases will still apply.

As of January 1, 2013, if you have a pre-FIRM home and it is a secondary residence, your rate subsidy is being phased out. You will see an increase each year until your rate reflects true flood risk. The increase will be 25% of the difference between what your rate currently is, and what it should be. The annual increases will continue until you have arrived at full rate.

Starting October 1, 2013, the same 25% rate increases will apply to owners of pre-FIRM business properties and “severe repetitive loss properties”, a property that has experienced severe or repeated flooding.

Also effective October 1st, if your policy has lapsed you can no longer get a subsidized rate. Full-risk rates will apply to owners who are not insured as of July 12, 2012 or if you purchased a policy after that date.

Flood insurance used to be assumable: sellers could transfer their flood insurance policies to new home buyers. Effective 10/1/2013 – but retroactive to home sales closed since 7/12/2012 – buyers must purchase flood insurance policies at the full risk rate.

Guidelines for owners of pre-FIRM condos and non-condo multifamily structures that will affect their subsidized rates are presently being developed by FEMA.

“GRANDFATHERED” RATES

The FIRM was re-mapped in May of 2003, raising the base flood elevation about 1 foot. At that time, most properties on the Island went from “A” to “V” (velocity) zone, which is a higher-risk classification. Policies written for V zones have a higher premium than an A zone. 

In the past we had grandfathered rates for homes that were built to code based on the prior flood rate map, as long as you had continuous coverage and if you could prove (with a flood elevation certificate) that you were in an “A” zone when the house was built.

The new legislation will phase out grandfathered rates over a 5-year period, beginning late in 2014. Property owners affected by the map changes, including non-subsidized (post-FIRM) policyholders, will get rate increases that will gradually adjust the risk upgrade from an A to a V zone. This annual increase will be 20% of the difference between what your rate currently is, and the full risk rate for a “V” zone property.

ANY policy that was first written AFTER July of 2012 will need a new flood elevation certificate. If you need a new flood elevation certificate (i.e. if you are selling your home and do not have one), you will be updated to a “V” zone and the rate will be higher. 

It is important to make sure that you keep a copy of your flood elevation certificate, as your risk assessment is based on the information on the certificate. Your insurance agent MAY have it on file, but they are not obligated to keep it. You will want to have your flood elevation certificate available when you speak to your insurance representative.

OTHER FACTORS that affect your RATE

Enclosures under the house also affect your flood insurance rate. They are generally allowed for parking, storage and entryways, and must be code-compliant. There was some discussion regarding “hanging enclosures”, usually golf cart storage sheds that are not on the ground. (Click HEREfor attachments about hanging enclosures) Know that 40% or more lattice surrounding your storage is considered an OPEN structure, NOT enclosed.

COBRA ZONES

Established in 1982, COBRA zones are areas not included in the NFIP. They are delineated on FEMA’s flood insurance rate map. Realtors are obligated to disclose if you are in a COBRA zone, but you should check the property appraiser’s records as well as checking the FEMA map to see if you are in or out. When the FIRM was updated in 2003, and most of the Island went from “A” zone to “V” zone, the COBRA line was moved 50 feet. So its important to check the map. There have been examples of the line change splitting a lot in half (half in, half out), so that if there is no structure on the property it will be considered within the COBRA zone when developed.

COVERAGE

What does flood insurance cover? Damage done by rising water or storm surge. The coverage with a basic NFIP policy maxes out at 250K/100K. Excess flood coverage is available, but it is very expensive for pre-FIRM or V zone properties. In the event of flooding, NFIP flood insurance will cover the damage up to the policy maximum allowed OR 80% of the value of the home if the home value exceeds the policy maximum.

Florida has a single-adjustor program for wind and flood policies. You CAN collect from both wind and flood policies on the same incident, but combined the payout cannot exceed the covered value of your home.

CITIZENS WIND INSURANCE CHANGES

Citizens uses cost estimators, so large houses are paying a lot more this year.

Many residents have been receiving a Certificate of Assumption notice. Citizens trying to move some of their policies to other companies i.e. Weston and Heritage. Both of these are new companies (Heritage is newer). Weston’s rates will parallel Citizens’ rates for at least 3 years. Weston is also re-insured. Citizens has a $500 billion reserve, enough to cover payout for one 100-year storm. The advantage of accepting the assumption: with Citizens, you run the risk of being assessed up to 45% for their losses. The disadvantage: will the new companies stay in business? If they go out of business, Citizens has to take you back but NOT at your old renewal rate.

Citizens is no longer renewing policies for homes with replacement costs of over $1 million (house value only, not property). In three years, that cap will be reduced to $750K. Also, their policies now have reduced coverage i.e. your screen porch is NOT covered if it is made of a different material from your house. Nat recommends that you check your coverage.

Also, for renters: Citizens has a “commercial residential” policy for condos only, where you can buy coverage up to the full replacement cost of the home. Now there is a new category for condo rentals: “transient occupancy”. It is for condos where 25% or more of the renters stay for less than 30 days. These condo owners can no longer buy the commercial residential policy. They will have to buy a full commercial policy at a higher rate.

MORTGAGE-FREE: DO WE HAVE TO INSURE?

Nat was asked about dropping flood insurance, but he does not recommend it. You do not HAVE to have wind insurance, you can just carry flood and homeowners. The homeowners’ insurance company cannot REQUIRE that you have a separate wind policy. 

SUMMARY

This insurance seminar was excellent, informative and much needed. The folks who attended got a whole lot of important information in a very short time. The upshot is: contact your insurance agent, and check the specifics that might apply to you.

Kudos to the volunteers of Info Central for arranging this presentation. In view of the positive response, this program may be repeated next season.

Friday, May 17, 2013

The Island Poll 2013

The results are in! We had 68 responses to our questionnaire, from a membership of 151.  We would like to thank everyone for their participation.



A few Islanders asked about privacy issues: please know that your email addresses were NOT shared with SurveyMonkey.com.  The final screen of the survey was simply an advertisement to be ignored.  Do not worry if you clicked the ‘opt out’ button,  your survey was still counted. The survey responses did not have any names or email addresses attached to them when they were collected for data.  Now and in the future, your survey participation is always anonymous.

We were also asked if only one person per household could take the survey.  There can be only one poll completed per email address. The annual dues cover all household members, but we mostly have only one email on file for the household. When we update the member directory, we will be adding a field to enter an additional email address.

Correction to the Island Poll: The Interlocal Agreement between Charlotte County and the Englewood Fire District is effective for 5 years.  It states: 

"This Agreement shall be for a term of five years beginning from the Effective Date and terminating on December 31, 2016.  Either party may terminate this Agreement without cause upon providing to the other party written notice of termination by April 1st of any year with termination to occur at the end of the calendar year (December 31st).  This section shall not be construed to limit or restrict the right to terminate this Agreement in any other manner specified herein.  Any termination of this Agreement by the County shall be done by a majority vote of the Board of County Commissioners."

Since the April 1st deadline has passed, the contract will still be in effect through December of 2013. The Island Watch will continue to monitor activity regarding fire protection services.

Tuesday, May 7, 2013

On the Agenda

On Monday, May 13th at 1:30 PM, the County Planning & Zoning Board will be holding a public hearing for the proposed Bridgeless Barrier Island Zoning District.  And what is that?

This year, Charlotte County is doing a little internal housekeeping.  Back in 1990, the County changed it’s Comprehensive Plan to restrict the development rights of properties on the bridgeless barrier islands to “one dwelling unit per acre or one dwelling unit per platted lot.”  The Future Land Use Map was updated at the time to comply, but the zoning was not.

In order to align the outdated zoning with the 1990 Comp Plan policy and the FLUM, they are creating a new “Bridgeless Barrier Island Zoning District.”  Our properties will be zoned “Coastal Residential”, the BBI version of single family residential. Just as it has been since 1990, no multi-family or commercial (hotel or condo) development will be permitted.

Two more public hearings for the District will be held at Murdock in June and July. The Island Watch will attend the hearings and keep us posted. 

Also, on May 28th, County staff along with Coastal Engineering Consultants, Inc. will be presenting their 10-year Beach & Inlet Management Plan to the County Commission.
A letter was sent on April 26th from Humiston & Moore, an engineering firm representing the Palm Island Civic Association, to endorse the 10-year plan.  The letter was sent to Charles Mopps, the Charlotte County Project Manager, and copied to the Board of County Commissioners, Coastal Engineering Consultants, Coastal Tech and the Beaches & Shores Advisory Committee.

Forward Motion on the Roads

On Wednesday, May 8th, several Islanders met with Public Works officials at San Casa to discuss the Island roads, and had a very productive meeting.  The meeting included several members of the Roads & Bridges steering committee, which helped to establish the criteria for the future R&B Advisory Committee.

The following items were discussed at the meeting:

1-It was decided Charlotte County will hire an independent consulting firm to do a feasibility evaluation of all of the non-paved roads. Islander Linda Cotherman researched the non-profit “Center for Dirt and Gravel Road Studies”, affiliated with Penn State University. They are an engineering company that specializes in unpaved roads. The expected result is a study which will give recommendations and options to improve and maintain the roads. The County supports the low-cost project.

2- It was agreed to do a materials test on several roads on the Island with a new and different kind of road material. This material is a composite of sand and shell which most closely resembles natural sand, providing the proper road drainage.

The next day, the Islanders met staff at the firehouse to take a tour of the sand roads.  The test areas for the new material were selected:  one on Palm Drive, and a couple on S. Gulf Blvd.  
Public Works staff said that they look forward to working with the new advisory board. They are presently in the process of making sure the applicants are qualified as per the ordinance that was just adopted. Staff is now vetting the applicants for meeting the ordinance criteria, and assembling packets for the commissioners to review.

The next step:

The County will hire the consultants to evaluate the Island roads, so that their report ready once the Advisory Committee is formed.  The present steering committee will be watching the sample patches, particularly after the rain, to evaluate whether the new material will work.

ABOUT THE CENTER FOR DIRT AND GRAVEL ROAD STUDIES:
Created in 2000, the Center specializes in education, outreach, research and project oversight related to the Environmentally Sensitive Maintenance of unpaved roads and trails.  These “ESM” practices stress long-term solutions to create more environmentally and economically sustainable unpaved roads.  Read more about the Center at: