Despite rising risk, flood insurance rates decrease

WEST LONG BRANCH - Fewer New Jersey homeowners own flood insurance today than they did a decade ago, and tens of thousands of state homes damaged during Superstorm Sandy have not yet been elevated to withstand the next storm, according to the Federal Emergency Management Agency.

Participation in the National Flood Insurance Program is down about 42,000 policies from the peak after Superstorm Sandy, to about 198,000 policies across the state today, according to the Federal Emergency Management Agency, which oversees the program. It represents a 17.5% drop in a decade.

"That's concerning since we know that the risk is growing," Michael Moriarty, director of the Mitigation Division for FEMA Region 2, said last month during a flood resilience discussion panel hosted by Monmouth University's Urban Coast Institute.

Sea levels rose more than 8 inches at the Jersey Shore from 1979 to 2019, according to data from Rutgers University, a trend expected to continue or worsen. Rainfall rates are up between 2.5 and 10% across the state since 1999, according to the New Jersey Department of Environmental Protection. The agency expects rainfall rates to rise 20% over the course of the century.

Both trends worsen flood risks statewide.

Additionally, of the 70,000 New Jersey structures that were substantially damaged by Sandy, only about 9,000 have since been elevated above the flood water line, Moriarty said.

"Those folks hopefully are high and dry and out of harm's way, at least for the next storm," he said, "but there's an awful lot that aren't."

Nationwide, fewer homeowners are participating in the National Flood Insurance Program, not just those in New Jersey, according to FEMA. The decline comes at a time when thousands of Florida residents are cleaning up the destruction of Hurricane Ian, which brought a 15-foot storm surge to Fort Myers Beach, and more are bracing for the impending impacts from Tropical Storm Nicole.

It is not just the southern United States that is at risk: New Jersey homeowners are more likely to face flooding in the future as the climate warms, New Jersey's State Climatologist David Robinson said.

Storms that bring flood-triggering heavy rainfall, like hurricanes, will likely double in number in the coming decades, he said.

Rising sea levels will also exacerbate flood risks along the Jersey Shore as well as coastal rivers and lakes, the climatologist said. Over the past century, sea level rose 15 inches along New Jersey's coast and will continue to rise for years to come, Robinson said.

"The people who are currently in the floodplain will be subject to flooding conditions more often," he said.

In many regions, these conditions will likely increase the size of existing floodplains, he said.

"We're going to have more problems in the future," Robinson said. "A run-of-the-mill storm at the end of the century... it's going to be much worse than a run-of-the-mill storm today."

Over the coming decades, about 40,000 properties in New Jersey will end up routinely flooded at high tide, according to Climate Central, a nonprofit news organization of scientists and science journalists.

By 2050, 26,835 acres in Ocean County and 3,012 acres in Monmouth County will be within the annual flood risk zone, according to Climate Central. That amounts to nearly 16% of Ocean County property and nearly 4% of Monmouth County property being at risk each year, according to the organization.

"Those are people ... who own some property and who have some bad news coming," said Don Bain, a principal adviser at Climate Central who spoke at the Monmouth University panel on flood resilience. "They're going to lose that property, because it's going underwater."

Yet, some homeowners found that the cost of a flood insurance policy did not pay off after a disaster, said Amanda Devecka-Rinear, executive director of the New Jersey Organizing Project, which helps disaster victims across the state.

"The fundamental problems with the program are not being addressed," Devecka-Rinear said.

FEMA enacted new flood insurance rates last year aimed at making payments more fair, but she said the new rate formula raised premiums on some homeowners to unaffordable levels. Under the new rating system, premiums can increase as much as 18% per year.

The payouts were not worth the pricey premiums for many homeowners, Devecka-Rinear said. New Jersey's median's home price was $487,500 as of May, but the National Flood Insurance Program pays a maximum of $250,000 for building damage and up to $100,000 for contents damage.

Premiums in New Jersey are about $1,000 per year. According to FEMA, the average flood insurance payout for damage over the past decade was $47,700.

After Sandy, many homeowners felt they were underpaid despite severe damage, Devecka-Rinear said.

"We need a better program that better serves policyholders and it needs to be cheaper," she said. "We do that by getting more people in the program."

Some homeowners found their private insurance carriers rejected flood claims by using unscrupulous engineering surveys of the damaged properties, said Rep. Frank Pallone Jr., of New Jersey's 6th Congressional District. Pallone is fighting to limit annual premium increases and expand oversight of private insurance carriers, but said support in Congress has not yet been strong enough to make the change because of the expense.

Increasingly, the National Flood Insurance Program is paying out more in claims than it collects in premiums. In October 2017, Congress canceled $16 billion in debt to keep the program afloat.

"We can't have people dropping out of the flood insurance program, because that's ... a major part of their ability to protect themselves," Pallone said.

Most of the people who reported significant damage after Sandy within his district live in modest homes in the Bayshore, the congressman said. Though these communities are receiving massive flood-prevention engineering projects through the Army Corps of Engineers and other flood mitigation efforts, affordability of flood insurance remains an integral piece of protecting these homeowners, he said.

"If you're not able to collect your flood insurance, and you can't rebuild, you don't have any money to go elsewhere, either," Pallone said. "It's just really important to make this affordable and not have people drop out."

Pallone submitted a bill last year that would reauthorize the National Flood Insurance Program through 2026, limit annual premium increases to 9%, cap the profits of private flood insurance carriers and increase protections for policyholders. The congressman said he hoped to gather support for the bill through the end of the year.

Not only are homeowners in Sandy-damaged areas at risk from future floods, but inland flooding is a serious problem across New Jersey, and likely to get worse over time, according to the state Department of Environmental Protection. Robinson, the state climatologist, said increasingly heavy rainfall trends are likely to increase the flood risk in the future.

Michael Barry, spokesman for the Insurance Information Institute, an organization that works to improve public understanding of insurance, said he has also noticed the changing trends.

"I'd say the biggest thing I've seen is the growth in inland flooding," he said. "It has to do with a lot of intense rainfall events... storm runoff systems aren't able to absorb that level of intense rainfall."

Disaster victims without flood insurance can apply for a FEMA Individual Assistance Program, but the program pays out far less than a policy through the National Flood Insurance Program, Barry said.

All New Jersey residents should consider buying flood insurance and pricing out policies, said Christine O'Brien, president of the Insurance Council of New Jersey, which represents the state's property and casualty insurers.

"I think everybody (in New Jersey) should consider themselves in a flood zone," she said. "They should at least search for a quote for flood insurance."

Devecka-Rinear, of the New Jersey Organizing Project, would like to see more than floods be covered by the national insurance program as a way to attract new homeowners.

"We should expand it to include all kinds of disasters, not just flooding, like drought, wildfire, tornadoes," she said. "This could be... a natural disaster insurance, and that can be really useful. But it also needs to actually serve policyholders and be responsive to like the demands of the community."

Amanda Oglesby is an Ocean County native who covers Brick, Barnegat and Lacey townships as well as the environment. She has worked for the Press for more than a decade. Reach her at @OglesbyAPP, [email protected] or 732-557-5701.