DATE: Saturday, June 14, 1997               TAG: 9706160225

SECTION: REAL ESTATE WEEKLY      PAGE: 04   EDITION: FINAL 

TYPE: Cover Story 

SOURCE: BY JEANNE MOONEY, SPECIAL TO REAL ESTATE WEEKLY 

                                            LENGTH:  168 lines

COVER STORY: REST EASIER WHEN A BIG STORM HITS

Fred R. Brusso Jr. has two words about flood insurance.

``Buy it,'' he says.

Pretty direct, huh? Well what do you expect from Norfolk's flood guru and the guy who pushes flood prevention year-round?

But this is June, the start of another hurricane season, and the time when city officials in Hampton Roads get windy about preparing for the Big One.

Want a piece of their advice?

Insure your property adequately.

Most homeowners insurance policies don't cover flood damage. And, contrary to what many people believe, Uncle Sam probably won't bail you out if flood waters lap across your front door.

In a presidentially-declared disaster, the federal government typically helps victims with loans, not grants, and the loans must be repaid with interest. The yearly cost of such loans to a homeowner can easily exceed the annual premium for flood insurance.

Those who do win federal grants in declared disaster areas receive no more than $12,600, the maximum allowed. On average, they get $2,500.

``The federal government is not in the business of paying your mortgage off,'' says Brusso, community rating system coordinator and zoning enforcement coordinator for Norfolk.

Brusso likes to make one other point: Hampton Roads has not been hit directly by a hurricane since 1933. Each year that passes without a storm compounds his worry that one will occur the following year.

``I think we're overdue,'' he says.

Brusso knows the damage floods could bring to Norfolk. It is the most flood-prone city in South Hampton Roads, say Brusso and James Talbot, Norfolk's deputy coordinator of emergency services. Nor'easters and nasty summer storms - not just hurricanes - all can inundate parts of this city. Here, on average, the land elevation is 11 to 12 feet above sea level.

If a Category 2 storm or stronger hit Norfolk, delivering at high tide a storm surge, or wall of water, 50 percent of the buildings in the city would be at risk of flooding, Brusso says.

``The risk is tremendous in Norfolk,'' Brusso says.

A Category 2 storm packs wind speeds of up to 110 mph and a possible surge of up to 8 feet. Damage from such a storm is generally regarded as minimal or moderate.

Talbot agrees the danger is very real. But he estimates that 80 percent of the city would be at risk of flooding if a Category 2 storm or stronger hit Norfolk and brought a storm surge at high tide.

``I don't care if you live in the 20th story of a condominium,'' Talbot says. ``You should get flood insurance. I highly recommend that all homeowners have flood insurance.

``Without it,'' says Brusso, ``you will not be able to recover.''

Flood insurance is available throughout Hampton Roads. It is sold by insurance companies and agents, and backed by the Federal Insurance Administration, part of the Federal Emergency Management Agency.

The annual premium for flood insurance averages around $300 a year for $87,000 in coverage for a building and its contents, FEMA says. But the premiums vary according to which flood zone a property is in, its elevation above sea level, the age and design of the building, its occupancy, and the amount of coverage sought. Coverage for a $50,000 home can cost as little as $135 a year, FEMA says.

Mortgage companies and lenders require flood insurance for properties facing the greatest risk of flooding. These homes are located within flood zones A and V, called special flood hazard areas, and are found along the coasts and waterways. They would be inundated by a 100-year flood.

What's a 100-year flood?

It's a flood level, for starters. And it has a 1 percent chance or greater of being achieved or exceeded in any year. The 100-year flood is a statistical average of the highest floods on record for a particular area, says Hugh D. Cobb III with the National Weather Service in Wakefield.

In Norfolk, about 15,500 properties are located in the high-risk zones of A and V and should be covered by flood insurance, Brusso says. But, only about one-third are.

How do they circumvent the requirement for flood insurance? Some properties are older and have paid off the mortgages. Some have owner-buyer financing instead of a conventional mortgage.

``We're better than the national average,'' Brusso says of the number of Norfolk properties in special flood hazard areas covered by flood insurance. Nationally, only 10 percent to 20 percent of such properties are covered.

In Virginia Beach, Mark Marchbank, deputy coordinator of emergency management services, says that people not in high-risk areas should at least consider buying flood insurance.

Find out what flood zone your home is in, Marchbank says. You can do this by checking the flood insurance rate maps, which are actuarial, produced by FEMA and kept by insurance agents, city building permit offices and local libraries. They reflect flooding from tidal surges.

His advice? ``Understand your liability.''

FEMA, of course, advises that all homeowners get flood insurance, even if they live in medium- or low-risk flood zones. More than 25 percent of all flood insurance claims come from areas not regarded as high-risk, FEMA says.

``The peace of mind you get from (flood insurance) may be worth it in the long run,'' says Nelson T. Lee Jr., a civil engineer in Virginia Beach's Department of Public Works. He answers more than 600 queries a year from insurance agents, Realtors, lenders and homeowners about what flood zones their properties are in.

Rhonda F. Floasin bought flood insurance two summers ago after she watched Hurricane Felix take aim at southeastern Virginia and the Outer Banks, stall off the coast and turn away.

``It concerned me enough that on Monday morning I wrote myself a policy'' for flood insurance, says Floasin, an agent with State Farm Insurance Co. She lives in the Middle Plantation section of Virginia Beach, an area that FEMA says faces moderate or minimal risk of flooding.

Floasin doesn't want to risk her home to chance. She pays about $300 a year for coverage.

``It's money well spent. I'm glad I've got it,'' Floasin says. ``If (a flood) takes my house, it may take me a while to get it rebuilt, but I won't be financially ruined.'' MEMO: FACTS ABOUT FLOOD INSURANCE

More facts about flood insurance:

Q. Can I buy flood insurance three days before a big storm hits?

A. Sure, but it may not get you what you want. You typically must

wait 30 days after applying and paying for flood insurance before it

becomes effective. There are exceptions to this rule, though. For

instance, a policy becomes effective if it is bought at or prior to a

mortgage loan closing.

Q. What does flood insurance cover?

A. Damage to buildings and personal property from storm surges, tidal

waves, mudslides, wave wash, and inland water and storm water flooding.

Consumers can buy as much as $250,000 coverage for a residence and

$500,000 for non-residential property. They also can buy as much as

$100,000 coverage for contents in a residence, and $500,000 coverage for

contents in a non-residential building. The deductibles start at $500

and go to $5,000, says Mary Beth Cramer, a spokeswoman for State Farm

Mutual Insurance Co. in Charlottesville.

Coverage also is available for basements, though it can cost a little

more. The insurance will cover cleanup expenses and items such as a

furnace, washer, dryer, hot water heater, air-conditioner and utility

connections. Carpet, paneling and furniture are not covered.

Q. Who is eligible for flood insurance?

A. Renters, condominium dwellers, commercial building owners and

homeowners all can buy flood insurance. So can residents of low-,

moderate- or high-risk flood zones, or areas previously flooded.

You are eligible to buy flood insurance if your community has joined

the National Flood Insurance Program. Run by the Federal Emergency

Management Agency, the program requires municipalities to adopt measures

that reduce the loss of life and property from flooding. Cities

throughout Hampton Roads participate.

Norfolk has excelled in its effort to educate its residents about

preventing flood damage. As a result, property owners citywide are

eligible for a 5 percent reduction in flood insurance premiums.

Q. What does it mean if I live in area that would be flooded by a

100-year flood?

A. It means you live in a high-risk flood zone, called a special

flood hazard area, designated as flood zone A or V.

It also means you're going to have to buy flood insurance if you want

a federally-backed mortgage. Lenders who issue loans in such high-risk

flood zones and don't require flood insurance can be penalized and

fined.

Q. What is a 100-year flood?

A. It is a statistical average of the depth, or level, of the worst

floods on record for a particular area. Each year, there is a 1 percent

chance or greater that level could be equaled or exceeded. The 100-year

flood isn't guaranteed to occur once every 100 years. It could occur in

consecutive years or repeatedly in the same year. A 100-year flood has a

26 percent chance of occurring during a 30-year period, the length of

many mortgages, FEMA likes to point out.

Q. How can I find out more about flood insurance?

A. Call your insurance agent. Or the National Flood Insurance Program

at 1-800-638-6620 or 1-800-611-6123. ILLUSTRATION: [Cover, Color Photo]

BILL TIERNAN

The Virginian-Pilot

BEFORE THE STORM KEYWORDS: FLOOD INSURANCE

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