Massachusetts is taking a bit longer than most other regions in getting new floodplain maps from the Federal Emergency Management Agency, thanks largely to the New England town meeting system compared with the relative speed of county government rule elsewhere.
But although delayed, some community residents – and by extension, banks and insurance agencies – are beginning to deal with the fallout from the changed designations. A new floodplain designation means new requirements for insurance, because all federally backed mortgages for homes on a floodplain require insurance.
That means banks that lend to such homeowners will have to act as the enforcers in this case. Insurance agents, meanwhile, will have to dust off their flood insurance policies and arrange them for the homeowners who will – very reluctantly – have to purchase protection at sometimes more than double their original homeowners’ policies.
Long Time Coming
This is the first time in nearly 30 years that FEMA has redrawn flood maps, and the process has been going on for several years already; while some people may find themselves removed from the floodplain, others will be placed on it for the first time.
Most Massachusetts counties have more than a year before the policies take effect, said David Mendelsohn of FEMA’s Boston regional office, who said that Bristol County is already under new maps and added that Suffolk County was due to make the switchover this fall.
FEMA is required to present its map changes to local governments and then allow for a six-month-long comment and appeal period, Mendelsohn said. Those requirements tend to delay things a bit in New England thanks to the town meeting structure of many local governments. Also, it’s possible that complicated appeals will require a trip back to the drawing board. Mendelsohn said FEMA, in conjunction with local governments, has been making every effort to let homeowners know they might be affected.
For those counties already in or approaching redrawn maps, it behooves residents to act fast – if they bought an insurance policy now, before they’re technically required to, it would mean they’d get a much lower premium rate which would be grandfathered in when the maps do take effect.
‘Heads In The Sand’
Still, around the affected areas surrounding the Boston metro, insurance agents say few people have called in to line up their coverage. For most kinds of flood insurance, homeowners go to the public National Flood Insurance Program but arranged through designated local agents.
“They’ve got their heads in the sand right now,” said Robert Kent of Arlington-based Rush-Kent Insurance Agency, who said he’s had just a handful of inquiries about flood coverage in the past couple months.
Generally, homeowners won’t deal with getting the new insurance until they’re forced to, after the maps are already in force, he said: “When people start to see the premiums, then they’re going to start squawking back.”
But because it’s banks that will enforce the changes, and insurance agencies that sell the government’s policies, those are the two entities that will likely catch the most heat from homeowners, he said.
Mike Winton, an assistant vice president with Watertown Savings Bank, had previously told Banker & Tradesman that banks often hire third-party servicing companies to look through banks’ books and alert them as to which borrowers needed to get the insurance.
However, Maurice Rubino of TYG Insurance Agency in Arlington says he expects more homeowners to only get the insurance when they stumble upon the issue after trying to refinance with their banks. Rubino has had one call to inquire about the insurance thus far.
Getting in on flood insurance before the maps take effect makes sense, he said, but with the economy the way it is, the extra expense is a matter of particular pain.
“This is not the best time to start pushing something else,” he said.
