NORTH CAROLINA: New flood maps could cost taxpayers millions - WRBL

Millions saved in flood insurance could cost NC taxpayers after next storm

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Whether you live in a flood zone and how much you pay for flood insurance is determined by Digital Flood Insurance Rate Maps that the state creates for the Federal Emergency Management Agency. Whether you live in a flood zone and how much you pay for flood insurance is determined by Digital Flood Insurance Rate Maps that the state creates for the Federal Emergency Management Agency.
RALEIGH, N.C. -

New maps released by North Carolina have many properties moving out of flood zones and saving homeowners on insurance costs. But the new maps could also plunge a federal program already flooded with debt deeper into the hole.

If you live in a flood zone and have a mortgage, you are required to carry flood insurance. Whether you live in a flood zone and how much you pay for flood insurance is determined by Digital Flood Insurance Rate Maps that the state creates for the Federal Emergency Management Agency.

When news that new maps were on the way, many homeowners feared the worst -- that water levels and their premiums would soon be rising. But preliminary maps are out, and they show just the opposite.

"What we were hearing in other states [was] 2000 percent increases in flood insurance. We were very concerned," said Willo Kelly, the government affairs liaison for the Outer Banks Association of Realtors.

John Dorman, the state's floodplain management director, explained that while some homes, especially near the southern coastal counties, will be added into flood zones, nearly 45,000 will now be removed, meaning they won't be required to buy flood insurance.

"We are seeing a significant number of properties moving out of the VE and AE zones," Dorman said. "We're trying to be more accurate whether a property needs to be shown in a flood zone or a property needs to be pulled out."

  • Click Here for a breakdown of flood zone changes by county

VE flood zones are mainly found along the coast and are the highest risk. The 'V' stands for velocity, meaning your home would literally get hit by waves during a storm. Policies for structures in these zones can run upwards of $30,000 per year.

AE zones are found all over the state where homes are prone to major flooding, but premiums cost much less. The average policy, according to FEMA, is around $650.

Dorman said as technology improves, the state is able to better predict flooding down to the individual home.

"We're going from a 5 feet vertical error rate to only 20 centimeters," explained Dorman of the accuracy of the new maps.

With 45,000 homes removed from flood zones and thousands of others coming out of the highest VE zone, Dorman said millions dollars could stop flowing into the National Flood Insurance Program, which is already flooded with debt.

Congress created NFIP in 1968 as a self-funded safety net to provide homeowners with affordable insurance. The program, however, has plunged $24 billion in debt following major storms like Hurricane Katrina, which washed out the gulf coast and the program's budget.

That debt, until paid off, ultimately falls on the taxpayers’ shoulders.

"There are a lot of issues with the program. North Carolina has paid $200 million in premiums than we've gotten in losses back," Kelly said of NFIP. "How we're supposed to pay down debt and pay claims, I think, is still going to be a challenge regardless of how many structures are in a flood zone."

FEMA would not provide someone to go on camera but released a statement saying, "We could not speculate on the effect changes to the [North Carolina] maps will make to the NFIP."

Fewer policy holders in the NFIP also means there are fewer claims FEMA has to pay out after a storm, but homeowners dropping coverage is something that no organization involved wants to see happen.

"If you're near a stream or a river or an ocean, there is a hazard. So we're not saying you shouldn't buy flood insurance," Dorman said. In fact, homeowners outside of a high-risk flood zone can get insurance at a preferred-risk, less-expensive rate.

"We want everyone to certainly be prudent and be covered by some type of flood insurance," Kelly said.

While it is hard to argue against better accuracy, future storms will show if NFIP will become a disaster itself.

"Modeling is one thing, but reality is another," Dorman added.

The new maps are preliminary and could change pending a final FEMA review and a public comment period.

Copyright 2014 WNCN. All rights reserved.

Jonathan Rodriguez

Jonathan Rodriguez is an investigative reporter and member of the WNCN Investigates team. His storytelling specialty is connecting the dots to get to the truth, with a goal of delivering results for our community. If you have something you’d like WNCN to investigate, contact Jonathan.

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