FEMA notifies property owners of ‘substantial damage’ flood insurance issue after Alaska disaster

The Federal Emergency Management Agency in the United States is notifying consumers, particularly in Alaska, of the “substantial damage” issue that they could encounter when making claims through the National Flood Insurance Program (NFIP).

Alaska experienced flooding this spring, and a major disaster declaration was made June 25. FEMA said in a statement this week that many property owners affected by the flooding could run into the substantial damage issue.

Substantial damage is the specific term that applies to a damaged structure in a Special Flood Hazard Area – or floodplain – for which the total cost of repairs is 50% or more of the structure’s market value before the disaster occurred, regardless of the cause of damage, according to FEMA.

The decision about whether a structure is substantially damaged is made at a local government level, generally by a building official or floodplain manager.

For communities that participate in the NFIP, substantial damage are usually required by local floodplain management ordinances, which  must be in place for residents of a community to purchase flood insurance, according to FEMA.

Once a determination on the percentage of damage is made, local officials then share that information with the property owners if their structure is substantially damaged.

According to FEMA. if a building in a floodplain is determined to be substantially damaged, it must be brought into compliance with local floodplain management regulations:

Owners who decide to rebuild may need to elevate their structures, or change them in some other way to comply with those local floodplain regulations and avoid future flood losses.

Owners of non-residential structures may be allowed to flood proof their buildings instead of elevating.

Property owners who have a flood insurance policy and a substantially damaged building in a Special Flood Hazard Area may be able to use additional funds from their flood insurance policy (up to $30,000) to help defray the costs of elevating, relocating or demolishing a structure.

Photo: July 24, 2013 — Two AmeriCorps members remove debris by hand from a flood damaged house in Galena, Alaska. Even when power tools are available, much of the disaster recovery work is done by hand. (Credit: Ed Edahl/FEMA)