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Things You Should Know If Your Waterfront Home Is Flooded

FEMA has established guidelines on damaged and flooded homes that lie in the 100 year flood plain. If the cost to repair or reconstruction is 50% or more of the actual market value the structure it must be raised above the corresponding base flood elevation for that parcel and will be considered NEW CONSTRUCTION

Substantial Improvement


Any reconstruction, rehabilitation, addition, or other improvement of a structure, the cost of which equals or exceeds 50 percent of the market value of the structure before the “start of construction” of the improvement. This term includes structures which have incurred “substantial damage,” regardless of the actual repair work performed. The term does not, however, include either:

Any project for improvement of a structure to correct existing violations of state or local health, sanitary, or safety code specifications which have been identified by the local code enforcement official and which are the minimum necessary to assure safe living conditions or

Any alterations of a “historic structure,” provided that the alteration will not preclude the structure’s continued designation as a “historic structure.”
Floodplain management requirements for new construction apply to substantial improvements. Increased Cost of Compliance (ICC) coverage does not apply to substantial improvements unless a structure is substantially damaged due to flooding.

Supplemental Information for Substantial Improvement

The basic types of improvements are rehabilitations or reconstructions that do not increase square footage, and lateral or vertical additions that do increase square footage.

Rehabilitation or reconstruction would be a partial or complete “gutting” and replacement of internal workings and may or may not include structural changes, If this action is substantial, i.e., over 50 percent of the structure’s market value, it is considered new construction, and the entire building must be elevated to or above the Base Flood Elevation (BFE) (or flood proofed if the building is non-residential). The insurance will be actuarial insurance and the structure will be considered Post-FIRM; i.e., subsidized insurance will no longer be available. Rehabilitations, like additions and repair of damage, represent investment and reinvestment in flood hazard areas that if not protected, are at serious risk of flooding.

For a lateral addition, if the substantial improvement is to add a room or rooms outside the footprint of the existing building, only the addition is required to be elevated to or above the BFE, i.e.; the existing building does not have to be elevated. Actuarial insurance rates will not apply to the addition, and the entire structure will retain its Pre-FIRM subsidized rate. Vertical additions would require that the entire structure be elevated to or above the BFE. Even though the improvement itself is entirely above the BFE, it is dependent on the walls and foundation of the existing building for structural support. The entire structure must be insured at actuarial rates, the Pre-FIRM subsidized rates are no longer available.