While some Jersey Shore homeowners were spared Hurricane Sandy’s wrath, countless others were not that lucky and face tough decisions about rebuilding, renovating and, in many cases, raising their homes (House raising).
The question of when a home should be raised is particularly baffling. No one can make you raise your house, but homeowners in flood zones who do not take action will face a significant increase in flood-insurance premiums and banks will likely withhold new financing.
From Sandy Hook to Cape May, homes are being lifted “by the thousands,” Whether a property is deemed at risk will be determined by the Federal Emergency Management Agency’s new flood elevation maps for the Jersey Shore. For now, the FEMA maps are preliminary advisory guidelines, not yet universally approved. Ultimately, they will recommend elevation heights for each home.
Flooding Services: The flood maps also tell homeowners what kind of foundation they need if they lift. Zones and soil conditions dictate the type of foundation you’re going to have. There are two zone designations: A and V. (The V signifies velocity of wave action.) A home in an A zone doesn’t necessarily require a deep foundation, and can be lowered onto footings spread underneath the house. A V-zone home requires a deep foundation and pilings, either standard (like telephone poles bored into the ground) or helical (corkscrewed into the ground).
The complicated and costly process of lifting a home begins with a visit by two separate engineers, one to prepare an elevation certificate, the other to test the soil. The elevation certificate indicates how high a home must be lifted to conform with the FEMA recommendation; the soil test determines what sort of foundation is needed beneath the lifted house. “If they find that the soil can’t support footings, you’ll need to use pilings.”
So why are some homes already lifted, while their neighbors are not? A lot of people are having trouble getting the financing, they are trying to see what money they can obtain through loans and grants and insurance. It’s going to take several years for this to all play out.”
Lifting a house can cost from $50,000 to $150,000 or more. The estimate includes the new foundation—the cost of which varies widely—and relocation of the utilities.
The Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) was signed into law by President Obama on March 21, 2014. This amendment to the National Flood Insurance Program (NFIP) enacted many changes, including an annual surcharge of $25 on all new and renewal flood insurance policies for primary residences and $250 for all others.
HFIAA slowed the elimination of subsidies authorized in the Biggert-Waters Flood Insurance Reform Act of 2012 and amended most of the provisions mandating that certain policies transition immediately to full-risk rates. To compensate for the decrease in revenue, the new law calls for the addition of a surcharge on all policies that will be collected until, with limited exceptions, all subsidies are eliminated.
The surcharge is a flat fee applied to all policies based on the property use of the insured building and is not associated with the flood zone in which the building is located or the construction date of the building (e.g., pre- or post-FIRM). The surcharge is in addition to a Federal Policy Fee that existed prior to the enactment of HFIAA and any applicable probation surcharge that may be applied to communities that fail to enforce the minimum floodplain management requirements of the NFIP.
Which surcharge applies to which policies?
- If the home is an owner-occupied single-family dwelling insured under the Dwelling Policy and it is the owner’s primary residence, the $25 surcharge applies.
- If the building is not an owner-occupied single-family dwelling insured under the Dwelling Policy and it is NOT the primary residence of the owner, the $250 surcharge applies.
Here are a few examples to help you understand what is involved:
- NFIP Dwelling Building coverage purchased by a landlord would include the $250 surcharge. Keep in mind, the surcharge is intended to assist homeowners with their flood insurance costs. In a situation involving commercial use of a private home, such a landlord situation, if even one of the units is the primary residence of the landlord, the $250 surcharge still applies since the building is being used for profit by the landlord. The renter, who would have contents coverage only for their possessions, would pay only $25 under the contents policy.
- The $25 surcharge does not apply to 2-4 family dwellings unless the policy is written for contents only or the policy insures a specific condominium unit.
- A single-family detached building that is in the condominium form of ownership would have the $250 surcharge. Keep in mind this would be under the Residential Condominium Building Association Policy (RCBAP), even though the unit is the owner’s primary residence. Remember, this is not a Dwelling Policy. A high-rise insured under an RCBAP will be surcharged $250.
For more information about getting your house raised or any other aspect of construction, please visit our website at www.wabuildingmovers.com or call our office at 908-654-8227