Many Sandy victims hit with steep flood insurance bills

STATEN ISLAND, N.Y. - Jean Laurie isn’t taking any more chances.

Nearly a year after Superstorm Sandy swept through her close-knit neighborhood, destroying 22 houses and killing two of her neighbors, she’s finally getting ready to rebuild the home where she lived for years with her husband and their rescue dog.

The Lauries got about $30,000 from the Federal Emergency Management Agency (FEMA) to rebuild their waterlogged home. But they decided to knock it down and build a new one, rather than try to repair what looked unfixable.

But that rebuilding comes with a catch. New flood maps drawn up by FEMA, along with reforms to the National Flood Insurance Program (NFIP) enacted in 2012, meant that many residents, including the Lauries, must lift up their homes or face dramatically higher flood insurance rates.

So the Lauries hoisted their house 13 feet off the ground, so they never have to worry about flooding — or the skyrocketing insurance rates — again.

Few homes on Staten Island — one of the few places in New York City where middle-class people can afford a small yard and white picket fence — are elevated now, and it’s hard and even a little funny to imagine some of the island’s tiny bungalows propped up on stilts or pilings.

The new flood insurance rules, which went into effect on Oct. 1, are intended to make the deeply indebted NFIP solvent by no longer charging government-subsidized rates on homes in flood-prone areas. The hikes will affect about 20 percent of the 5.5 million people who have NFIP policies around the country, as well as thousands more who live in areas that didn’t used to be considered flood-prone but who now must buy insurance under the new FEMA map.

The NFIP subsidized rates have allowed people for years to build in flood-prone areas that, in some cases, probably never should have been built on in the first place. But the feds’ solution to this — hiking up rates over four years until they reach market price — could leave millions of homeowners unable to afford the steep new prices. If these homeowners try to sell their houses, they’ll most likely find it tough to find a buyer, who would inherit the new insurance rates. (People with mortgages are required to purchase the insurance — those who’ve paid off their homes can skip it.)

The Lauries were told their insurance rate could be as much as $9,500 a year if the house wasn’t hiked 13 feet. Before the storm, the couple paid no flood insurance at all, because they had paid off their mortgage and thus weren’t required to purchase it. They’ll pay just $435 per year for insurance when the new, elevated home is completed.

But others on the island began their pricey rebuilding process before the realized they had to lift their homes. Now they’re faced with the daunting prospect of coughing up more cash to elevate their homes or being forced out by the skyrocketing premiums, just a year after a storm made many of them homeless.

Eileen Pepel moved back into her badly damaged home last April, five months after the storm, after using all her insurance money to repair it. She learned later that her insurance premiums could go up dramatically if she didn’t elevate the house — a $30,000 expenditure on top of what she’d already spent.

“It’s not in the realm of reality,” says Pepel, who lost her job as an art teacher at a nearby Catholic school when her position was eliminated to save money after the storm.

“Before we did any work, I would have raised my house right away,” she said. But now, it’s too late.

Many people are also wary of paying to hike up their homes before the new FEMA flood maps are formalized, saying exactly how many feet the homes should be elevated.

Some homeowners are refusing to make the required changes.

“They can’t tell us how high we have to go,” said Pepel’s sister-in-law, Karen Zboinski, who is also choosing not to lift her home. “We have to move on.”

Rep. Michael Grimm, a Republican who represents Staten Island and parts of Brooklyn, said residents should see if they qualify for assistance from the city to raise their homes as part of the NYC Build It Back program.

“Unfortunately, they need to engage the city,” Grimm said.

The congressman said he is working to pass a bill to delay the rate hikes until the NFIP bill, called the Biggert-Waters Flood Insurance Reform Act of 2012, can be fixed. “It’s causing an undue burden on so many people that were just ravaged by storms,” he said.

Grimm said he’s worried the rates could be so high that some people don’t buy flood insurance at all, which means more people would need to be bailed out the next time a disaster hits, effectively undoing the fiscal good of reforming the NFIP. Those with mortgages must buy the insurance, but people whose homes have been paid off can forego it.

Joanna Tierno, a Staten Island resident facing a 4,000 percent rate hike under the new rules, says she’s considering borrowing money to pay off her mortgage and then going uninsured, because it would cost so much less. “We’re up against not just recovering from a disaster, but being hit by superhigh rates that’s basically … taking people’s homes from them,” Tierno said.

For their part, the Lauries are returning, but on their own terms.

“We were not going to try to come back unless we could come back how we wanted to,” Jean Laurie told Yahoo News on a sunny day in October. She stood on the empty lot where her home used to be, nostalgically pointing out the spots where she had built a Japanese garden and installed a heated pool before the storm swept it all way.

“It was gorgeous,” she said.