On August 22, 2016, FEMA directed flood insurance claims adjusters to help local government officials in promptly identifying “Substantially Damaged” property. Specifically, FEMA stated that claims adjusters are required to submit daily reports of possible substantially damaged properties to the National Flood Insurance Program Bureau & Statistical Agent.
Substantially Damaged is a term that applies to a damaged structure in a Special Flood Hazard Area or floodplain where the cost total cost of repair is 50 percent or more than the structure’s market value before the flood occurred. For example, if the value before the flood was $250,000 and the repairs cost $130,000, the structure is “substantially damaged.” The land value is excluded from the calculation.
The decision about whether a structure is substantially damaged is made at the local government level, generally by a building inspectors, zoning administrators and other permit official that enforce the flood-plain management requirements of a community participating in the National Flood Insurance Program.
A “substantial damage” determination is important because the determination will dictate whether additional work will be needed to comply with local codes and ordinances, such as elevating a house in a floodplain (or flood proofed if it is a non-residential structure) to or above the level of the 100-year or base flood, and meet other applicable requirements.
If the structure is substantially damaged and not brought into compliance with community floodplain management regulations, then your flood insurance premiums could increase to thousands of dollars per year.
If you need help with preparing your flood insurance claim, your supplement claim or with filing a lawsuit against your flood insurer, please call me at 866-558-9151. Please be advised that you may be facing important legal deadlines so don’t delay.
Answers To Questions About Substantially Damaged Buildings