FEMA 50% rule could catch some homeowners off guard

October 25, 2024, WFLA-TV News Channel 8, Tampa – “A home that was built prior to the current code and was damaged, more than 50% is pretty much subject to the 50% rule,” said Lisa Miller, an insurance consultant with Lisa Miller & Associates. “Typically, a county will issue what’s called a substantial damage determination letter,” Miller said. “Those letters are very specific. They give timelines as to when you have to respond, and that starts the process of a back and forth between you and the county.”  “If you get one of those letters, read it carefully,” Miller said. “Determine how you’re either going to convince the county that you’re not damaged more than 50% or say to the county how you’re going to rebuild with the current code.” (Original story location, including video version: https://www.wfla.com/news/local-news/fema-50-rule-could-catch-some-homeowners-off-guard/)

TAMPA, Fla. – Between the flooding and the cleanup, those who endured Helene and Milton have faced many hurdles.

Now, a federal regulation, FEMA’s so-called “50% rule,” might cost them hundreds of thousands of dollars. It’s something that’s catching some homeowners affected by flooding and damage off guard.

“I’ve been living here for 17 years,” Candace Blackburn said. “My property taxes are about $9,000 and if I knock it down, they’re going to be $22,000 a year. They could tell us to knock it down, but then we’re not going to be able to stay.”

FEMA’s 50% rule is a complex regulation that can cost homeowners a small fortune. Essentially, those in a flood zone who have substantial damage might not be allowed to just do simple repairs. They may be forced to tear down their home, and completely rebuild, at a higher elevation.

Local building officials will be the ones to give the bad news.

FEMA’s rule is triggered when the cost of repairs exceeds 50% of a home’s market value.

“A home that was built prior to the current code and was damaged, more than 50% is pretty much subject to the 50% rule,” said Lisa Miller, an insurance consultant with Lisa Miller & Associates.

Homeowners can go to their local property appraiser’s website and find their home’s market value, and then divide that by two.

As per federal regulations, the total cost of repairs cannot exceed that number.

“Typically, a county will issue what’s called a substantial damage determination letter,” Miller said. “Those letters are very specific. They give timelines as to when you have to respond, and that starts the process of a back and forth between you and the county.”

Federal officials say they want people in vulnerable areas to upgrade their homes because when they don’t, they get flooded repeatedly. Then, the National Flood Insurance Program (NFIP) has to make a payment, and all taxpayers are on the hook.

“If you get one of those letters, read it carefully,” Miller said. “Determine how you’re either going to convince the county that you’re not damaged more than 50% or say to the county how you’re going to rebuild with the current code.”

Copyright 2024 Nexstar Media Inc. All rights reserved.