THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, January 14, 1995 TAG: 9501120283
SECTION: REAL ESTATE WEEKLY PAGE: 19 EDITION: FINAL
COLUMN: About the Outer Banks
SOURCE: Chris Kidder
LENGTH: Medium: 91 lines
The Upton-Jones amendment to the National Flood Insurance Program provides funds for moving or demolishing erosion- threatened homes. Implemented in 1988 and repealed in 1994, it was considered a giveaway program by many, a godsend by a few.
In fact, it was neither because far fewer homeowners made use of its benefits than expected. On the Kitty Hawk beachfront, for example, where erosion has been a problem, only a handful of homeowners have used Upton Jones.
As many as 50 percent of the remaining oceanfront houses could be eligible for Upton-Jones, says Dan Smith, Kitty Hawk's building inspector. He doubts that all are insured through NFIP, a requirement for Upton-Jones reimbursement.
But for NFIP policyholders, it's not too late: Upton-Jones claims may be filed until Sept. 22.
After Sept. 22, ``the idea of being able to move a cottage and have the government pay for it will be over,'' says Nags Head insurance agent Fletcher Willey. ``If those who have homes in danger wait, they'll miss a window of opportunity.''
Waiting for nature to run her course is what most homeowners prefer to do. Most can't replace their oceanfront land. Others have been unhappy with NFIP appraisals. Some just don't want to give up their beach dream.
Just in case you were thinking about getting off the beachfront before your house takes the plunge, here's how Upton-Jones works.
Owners of insured, qualified buildings can receive up to 40 percent of the building value to pay for moving the house off the oceanfront, setting up the house in a new location, and cleaning up the old site.
A more popular option has been demolition, which provides 100 percent reimbursement plus up to 10 percent of the building value for clean-up costs.
The value of the land is never covered and policy deductibles are withheld from settlements.
To qualify, owners of threatened buildings must have insured the house on or before June 1, 1988, or for the term of ownership, whichever is less.
The house must be certified by the state to be in imminent danger of collapse. Certification is free through the local Coastal Area Management Act officer.
If a house has already been condemned by the town or county, additional certification is not needed.
After notifying your insurance agent that you wish to file a claim, an appraisal is done and an adjuster establishes the value of the house. NFIP pays all adjuster and appraisal fees.
Prior to final authorization by NFIP, homeowners may examine appraisal information and compare the options to move, to demolish or to leave the house as it is. Once a claim gets final approval from NFIP, the program guidelines call for future coverage reductions if the house is not moved or demolished quickly.
For more information about filing an Upton-Jones claim, call the NFIP Coordinator at the N.C. Division of Emergency Management, 919-733-3867 or your local building inspector.
Attention has been focused lately on cost-cutting reforms to NFIP, most of which bode ill for the coastal homeowner. But there's good news for property owners who aren't eligible for the national program.
Many homeowners restricted from buying NFIP coverage under the Coastal Barrier Resources Act of 1982 (and updated with the Coastal Barrier Improvement Act in 1991) may purchase privately underwritten flood insurance.
Only homes in designated Coastal Barrier Resources System areas, built in compliance with coastal building codes, will be covered under these policies. On the Outer Banks, this applies to properties built after Oct. 1, 1983, north of Corolla and some soundside properties at Kinnakeet Shores on Hatteras Island.
These private flood policies, written through Lloyds of London and Zurich American, are available through the Fletcher Willey Agency, Nags Head; other agents should be selling them soon.
Rates for the private policies are higher than NFIP rates for comparable coverage, says Willey, ``because we're not eligible for the subsidies the federal program gets.''
Until these policies became available a few months ago, building north of Corolla often meant building without bank financing and without flood insurance protection. Some owners purchased NFIP coverage through agents unfamiliar with CBRS restrictions only to find out later the policies were void.
Not all lenders have accepted the new private insurance, says Willey. ``But more are saying OK and now we're writing builders risk policies in this program, too.'' He estimates that private policies have already been written on more than 40 houses in northern Currituck County. MEMO: Send comments and questions to Chris Kidder at P.O. Box 10, Nags Head,
N.C. 27959. by CNB