Your Money: After Hurricane Sandy, Rebuilding Under Higher Flood Insurance

By now, most know how much insurance money they have to work with, though plenty of people are still struggling to get more. But a new federal law that happened to coincide with the arrival of the storm will cause flood insurance premiums to skyrocket and require stricter, and thus more expensive, rebuilding standards.

So in the most devastated communities, families are being forced to make difficult financial calculations: can they afford the new flood insurance premiums, which, at worst, can reach as high as $30,000 a year? Do they have the money to rebuild their homes to the government’s new specifications? Does it even pay to stay?

Some families have already thrown up their hands and put their houses up for sale, while others talk of making the best of really bad options. “This issue is more devastating to more people than Sandy itself, believe it or not,” said Ron Jampel, a resident of the Shore Acres section of Brick, N.J., who started an advocacy group for affected homeowners in New Jersey called Save Our Communities 2013.

Maria Zanetich, who lives across the street from the water in Point Pleasant, N.J., with her husband and two grown daughters, considers her family lucky in many respects: their first floor is still gutted, but they can continue to live on the top floor of their three-bedroom raised ranch. Their insurance premiums will increase sharply, however, unless they elevate their home five feet, which she said could cost more than $100,000 because their home sits on a concrete slab instead of a foundation with a crawl space.

“I paid my flood insurance on time every year, but I didn’t even know that I had a subsidy, much less one that is now being phased out,” said Ms. Zanetich, who provides early intervention services for children with developmental delays. “The insurance moneys that we received will not cover both elevating my house and repairs.”

She and her husband are applying for grant money — they have already received their flood insurance claim payment — and once they hear about that, they can determine their best course of action. “The more that I try to figure it out,” Ms. Zanetich said, “the more I realize that I don’t know what I don’t know.”

Many people with homes built before the first flood maps were drawn — in New York, for instance, that’s Dec. 31, 1974 — have long received flood insurance at subsidized rates that did not reflect the property’s true risk (though only about 20 percent of flood policy holders nationwide receive these subsidies, according to the Federal Emergency Management Agency). Other homeowners were paying lower rates because the agency failed to update the flood maps, which did not do homeowner’s — or taxpayers, for that matter — any favors.

“A lot of the maps are so old, they have become unreliable,” said J. Robert Hunter, who once ran the flood program and is now the director of insurance at the Consumer Federation of America. “It’s not doing you a favor to give a cheap rate, and a year later, your house is gone,” he said, adding that it also encouraged unwise construction in certain areas. “Consumer aren’t helped by misleading maps.”

But some of that is about to change with the new law, enacted last July, which is aimed at strengthening the finances of the National Flood Insurance Program. FEMA runs the program but it is administered by private insurers.

The subsidies on these older properties started phasing out for vacation and second homes at the beginning of the year, and will rise by 25 percent annually until the rates reflect the actual risks. Homes with “severe and repeated” flooding will start to see the higher rates on Oct. 1, and also face 25 percent increases each year. Everyone else with a subsidy can keep it, at least until they sell to another owner or the policy lapses. Other properties may face higher rates when their community adopts a new flood insurance rate map (commonly called FIRMs) that shows a higher risk, but the best way to know is to ask your insurance agent. Preliminary maps are being released in New York and New Jersey in coming months, but they will not be formally adopted until late next year.

The new maps estimate the type of flooding that is likely to occur when a so-called 100-year storm sweeps into a specific area and establish a base flood elevation, or the level at which the water is expected to rise to in a storm. So incorporating those maps into rebuilding plans is important. (Early versions have already been released and are not expected to change much, FEMA officials said.)

The insurance premiums are determined, in part, by where your home stands relative to that base. The higher you go, of course, the less you pay. Consider a single-family home in a zone with a moderate to high risk of a flood, that has a flood policy with $250,000 of coverage: if the home is four feet below the base flood elevation, the homeowner would pay an annual premium of about $9,500, according to FEMA. But if the home was elevated to the base, the premium would cost $1,410. Hoist the home three feet higher, and the premium would drop to $427.

Elevating is challenging, if it is even possible, and then there is the bureaucratic morass many people are forced to push through to figure out how to pay for it all. That’s a major reason Chris Buono and his wife, who have two young boys, used their insurance claim money to pay off their mortgage, sell their damaged home in Silverton, N.J., and buy another house nearby but out of the flood zone.

They researched every possibility of saving their home, even considering lopping off the master bedroom and bathroom so the home could fit in their backyard while they installed wood pilings under the home’s original footprint. “It just kept coming down to a lack of solid answers and insanely varying estimates and the chance the bottom could fall out from under you years later in some way,” Mr. Buono, a professional guitarist, said. “Way too risky.”

He said many people he knew who were trying to elevate were scared about what they were getting themselves into. “How is that getting back to normal?” he said. “Living with a financial gun to your head after you paid to be covered.”

Homes in high-risk areas that have been “substantially damaged,” where repairs cost more than 50 percent of the structure’s value before the storm, must be fixed so that it complies with current law. Flood insurance policies do offer an extra $30,000 for this work, including elevation. But many homeowners said that did not begin to cover the added expense.

That’s the case for Will Martone and his wife, Eileen, both 62, who bought a second home on the water in Toms River, N.J., almost three years ago. They planned to work a couple of more years and retire there. But the storm caused more than $100,000 of damage, and their insurance claim paid less than half that. They have hired an advocate to help them recover more money, but that is only part of their problem. They, too, need to raise their home, since it sits below the level at which floodwaters are estimated to rise in the event of another big storm. If he does nothing, Mr. Martone said, his annual flood insurance premiums will soar to $31,000. If he raises his home by five and a half feet, he’ll pay $7,000 a year. And if he goes two feet higher, that will bring the rate down to $3,500.

They are entitled to collect the extra $30,000, but since their split-level home is on a slab, the costs are astronomical. That “puts me in the category of $150,000 plus,” said Mr. Martone, a district facilities manager for Siemens Industry, “which I do not have readily available. So there’s a good chance I’ll lose this home.”

Both New York and New Jersey have outlined their plans for various recovery programs in recent weeks, including community development block grants, even programs that would buy properties in high-risk areas for their pre-Sandy value. But people like Mr. Jampel, the founder of the homeowner’s advocacy group, say they do not believe there will be enough money to go around.

Yet for many homeowners, that’s their only hope. Emily Burek, 28, whose three-bedroom home in Highlands, N.J., took in nine feet of water, received $15,000 from her insurer thus far. But she said that covered only a third of her damages, and she is required to elevate. “Without any money to do that, I will be forced into foreclosure,” she said. “The town says there will be grant money, but they’ve also said a lot of things that turned out not to be true. So I’m not sure if it’s better that I just give up now and cut my losses.”

Your Money: Fighting the Insurer Over Hurricane Sandy Damage

Four months after the storm, they are waiting to collect enough money from their flood insurance policy to repair the three-story, 150-year-old building that is their home. The water filled the five-foot crawl space under the house and rose to three feet on the first floor, which Mr. Kondaks had used as a painting studio and work space.

“Until you experience it, it’s hard to conceive,” Ms. Kondaks said. “You just think, ‘Water. Water cleans things. Water doesn’t destroy an 1860s house that has been here forever.’ ”

About a month after the storm hit, an insurance adjuster, representing the flood insurance company, arrived on the scene and spent a mere 20 minutes to estimate the cost of repairs, she said. The figure he came up with, about $49,000, is a fraction of what the couple said they expected to pay to restore their home to its prestorm condition.

As a result, Ms. Kondaks, who typically assists with her husband’s business installing fine stonework in homes, has instead been working on the claim as if it were her full-time job.

They surely aren’t the first storm victims to do battle with their insurer to try to collect what they believe they are owed. In their case, they say their dispute can be traced back to the insurance adjuster.

Adjusters are typically contractors hired by the insurers in the wake of a big storm. Known as “storm troopers,” they descend from all corners of the country to estimate what is called the “scope of loss,” or what it will take to put the home to its prestorm state.

“All of these guys are different,” said Leslie L. Knox, a public adjuster, who is hired by policyholders to help resolve disputes against their insurance companies. “Some are very knowledgeable, and some lack the experience necessary to handle the claims. There is such a dichotomy of talent out there.”

Flood policyholders typically dispute one of two things — what is covered by the policy and how it should be priced. In the Kondakses’ case, their public adjuster, Michael Palmiero of American Claims Adjusters in Brooklyn, said the scope of their loss had not been properly addressed by the insurance adjuster. “It was an impossible task to get him back to say, ‘You overlooked this. You need to sit down with us and we need to go over the whole file end to end.’ ”

A soft-spoken woman, Ms. Kondaks, who lives with her husband on the top two floors of their building, acknowledges that they are lucky compared with many other victims of Hurricane Sandy. But when she speaks about the problem with her insurer, she sounds as if she has been to war. From the way the couple has been treated by their insurance company, she said, “It’s getting hard to believe we even had a flood.” The adjuster submitted his final report “without reviewing any of the painstaking amount of documentation we provided — photographs, labor sheets, receipts and real estimates,” she added.

Those documents explained that, among a long list of other items, the couple had to remove five layers of flooring. Each layer held water for weeks after the storm, compromising the joists underneath, which are still exposed. “We are having to sanitize, scrape and seal every bit of wood that was exposed to salt water,” she said. “If we don’t do this, we risk dry rot setting in, not to mention mildew.”

The adjuster, working for Colonial Claims on behalf of Fidelity National Indemnity Insurance, estimated that the work on the floor joists would cost a mere $425, compared with the $2,927 projected by the contractor hired by the homeowners. The insurance adjuster’s overall report also excluded a stone floor and fixtures in the bathroom, insulation in the basement and a subfloor in the hallway, to name a few of the other missing items, she said.

Square Feet: Pier 17 Mall Has Upgrades Planned After Hurricane Sandy

But the storm surge largely spared Pier 17, the seaport’s long-maligned shopping mall to the east. The operators of the mall, the Howard Hughes Corporation of Dallas, say it escaped damage because it is three feet above the pier, which in turn sits well above the water. And so, the company, which holds the ground lease to the city-owned pier, is moving forward with its plans to transform its dated festival marketplace into an open and airy three-story retail and entertainment center.

The local community board voted last month to support the proposal, despite reservations about the signage and some other design features. Though the plan is still working its way through the city’s land use process, the developer’s agreement with the city Economic Development Corporation requires that construction begin on July 1. David R. Weinreb, the chief executive of Howard Hughes, said in a telephone interview that the company would meet that deadline.

After being blocked off by metal gates and closed until this month because of concerns about the stability of the pier, the mall is now open, though some stores are still closed. Inspectors from Halcrow, an international engineering company hired by Howard Hughes, recently determined that the structure was sound. The pier is south of the Brooklyn Bridge, just beyond Fulton Street.

“The pier got a solid rating,” Christopher J. Curry, a senior executive vice president at Howard Hughes, said in a recent interview at the company’s offices on Fulton Street. City officials confirmed that no problems were found at the pier.

In addition to Pier 17, the company controls 170,000 square feet of space farther inland at the seaport, including stores like Brookstone, Ann Taylor and Coach, which suffered extensive storm damage.

“We’re working diligently to remediate the shops,” Mr. Weinreb said. Asked whether the closed stores would remain at the seaport, he said, “We’re in discussions with our tenants about what is in their best interests. Many of those tenants enjoy very good sales and fully expect and want to be back open.”

From the mid-1980s to the early ’90s, the seaport was a big draw, especially for young people, who crowded its bars and restaurants. But then it fell out of favor with New Yorkers, though it has remained a must-see for visitors taking in other downtown sites, retail specialists said.

The operators of the mall at Pier 17 have long wanted to give it more cachet with city residents. Shortly before the economic crisis, a previous owner, General Growth Properties, a mall developer, introduced a much more ambitious plan for the seaport, including a 42-story tower, which was unpopular with residents.

The Howard Hughes Corporation, which is primarily known for its vast master-planned communities like Summerlin, near Las Vegas, acquired the shopping center in 2010, when it was spun off from General Growth as the mall company was emerging from bankruptcy.

Completed in 1985, the Pier 17 shopping center was developed by the Rouse Company, the creator of marketplaces in Boston and Baltimore. (General Growth bought Rouse in 2004.)

But by the time the mall opened, the marketplace concept may already have been outmoded. The existing mall “has basically been a disappointment to everyone over its life,” Hardy Adasko, a senior vice president for planning at the city Economic Development Corporation, testified last week at a City Planning Commission hearing. His agency sees the redevelopment of the pier as a way of advancing its long-term investment in the waterfront, he said.

In contrast to the marketplace design, which was intended to shield visitors from the grittiness of the port, the new structure will capitalize on its waterfront location, offering abundant views of the bridge. Outdoor space on either side of the pier also will be enhanced.

Media Decoder Blog: How Hurricane Sandy Slapped the Sarcasm Out of Twitter

Brendan Mcdermid/Reuters People congregate on Tuesday in front of a building in Manhattan that still has wireless Internet access.

Twitter is often a caldron of sarcasm, much of it funny, little of it useful. But as a social medium based on short-burst communication, Twitter can change during large events — users talk about “watching” the spectacle unfold across their screens. It is, after all, a real-time service, which means that you can “see” what is happening as it happens.

As a media reporter, my Twitter feed has a strong Manhattan bias, serving as a sandbox for media and technology types that I follow. Under normal circumstances, we show up on Twitter to preen, self-promote and crack wise about the latest celebrity scene. If that New York cohort has a soul — insert your own joke here — you could see into it on Twitter.

And then along came Hurricane Sandy. For most of Monday, people on Twitter were watching an endless loop of hurricane coverage on television and having some fun with it, which is the same thing that happens when the Grammys or the Super Bowl is on. But as the storm bore down, Twitter got busy and very, very serious.

It is hard to data-mine the torrent – some estimates suggested there were three and a half million tweets with the hashtag #Sandy — but my feed quickly moved from the prankish to the practical in a matter of hours as landfall approached. I asked Simon Dumenco, who writes the Media Guy column for Advertising Age and is well versed in the dark arts of Twitter analytics, about the tonal shift via e-mail.

“I kept a close eye on the Top 10 Trends chart as Sandy was bearing down on the East Coast, and there was no shortage of gravitas on Twitter,” he wrote. “The last time I checked before losing power in my Manhattan apartment, seven of the 10 trends were Sandy-related — New Jersey, ConEd, Hudson River, Lower Manhattan, FEMA, Queens and #SandyRI. Clicking on each of them yielded plenty of information.”

At my home in suburban New Jersey, a 30-foot limb dropped down at 4 p.m., so the illusion that this was an event happening to someone else quickly dissipated. And at 8 p.m., just when we hunkered down in front of the big screen, the house went dark. This very large event would not be televised. We built a fire and sat around a hand-cranked radio, but I was diverted over and over by the little campfire of Twitter posts on my smartphone.

It was hard to resist. Twitter not only keeps you in the data stream, but because you can contribute and re-tweet, you feel as if you are adding something even though Mother Nature clearly has the upper hand. The activity of it, the sharing aspect, the feeling that everyone is in the boat and rowing, is far different from consuming mass media.

Because my Internet connection was poor, so much of the rich media — amazing videos and pictures documenting the devastation — was lost to me. In true media throwback fashion, Hurricane Sandy was something I experienced as a text event, but I don’t feel as if I missed much. The Brooklyn-Battery Tunnel inundation, the swamping of the Lower East Side, the huge problems at New York hospitals, the stranding of the holdouts in Atlantic City, all became apparent on Twitter in vivid detail.

At the same time, much of the seen-it-all and isn’t-it-dumb seemed to leak out of my Twitter stream. (The message that earnestness was nascent and irony was on the run seemed widespread — the servers of Gawker, the hilarious and ill-mannered Manhattan snark machine, were drowned and the site went down. Still is, as a matter of fact.)

Many local television stations did an amazing job and the big cable news outlets played large, but the template of the rain-and-wind-lashed correspondent shouting to a blow-dried anchor back in the studio has its limits. The local radio stations were nimble and careful, including WCBS, WNYC and WINS, but they were part of the story on occasion, with transformers going down and hurricane-induced malfunctions along the way.

Manhattan is the epicenter of a number of big blogs, including Gawker, BuzzFeed and Huffington Post, but each had to pivot to Twitter, among other platforms, as their servers succumbed to encroaching waters. (At a conference last year, Andrew Fitzgerald of Twitter wondered about the utility of the platform if the end of the world arrived in the form of an alien attack. The people participating in the discussion pointed out that the lightweight infrastructure of Twitter and its durability would probably make it very practical should end times draw nigh.)

In the early days of Twitter, there was a very big debate about whether reporters should break news on Twitter. That debate now seems quaint. Plenty of short-burst nuggets of news went out from reporters on Twitter on Monday night and they were quickly followed by more developed reports on-air or on the Web. There were abundant news posts from @antderosa of Reuters, @acarvin of NPR and @brianstelter of The New York Times, among many others, but there were also tweets from ordinary people relaying very important information about their blocks, their neighborhoods, their boroughs. I knew what was happening to many of my friends as far away as the District of Columbia and as close as the guy up the block. There is no more important news than that.

Jay Rosen, a professor of journalism at New York University, wrote in a note: “To me the most basic act of journalism there can be is: ‘I’m there, you’re not, let me tell you about it.’ Or: ‘I heard it, you didn’t, let me tell you what Bloomberg said.’ And the fact is Twitter is rife with such. That is why it is basic in a sprawling emergency.”

Twitter is a global platform, but it can be relentlessly and remarkably local should the occasion — or crisis — arise, as Choire Sicha, the founder of The Awl, pointed out.

“Twitter was phenomenally useful microscopically — I was literally finding out information about how much flooding the Zone A block next to me was having, hour by hour — and macroscopically, too — I didn’t even have to turn on the TV once the whole storm,” he wrote. He pointed out, as have many others, that there was abundant misinformation rendered in 140 characters as well, which reminded @kbalfe of another rapid-fire medium, actually. “Was a lot like cable news: indispensable … yet full of errors.”

In fact, some people used the friction-free, democratic nature of the medium to intentionally stir panic. On Tuesday, BuzzFeed identified — “doxed” in the nomenclature of the Web — a person they said they said was the guy behind @comfortablysmug, an account that suggested that Gov. Andrew M. Cuomo had been trapped by rising waters, that Con Edison was shutting down all of Manhattan and that the floor of the New York Stock Exchange had been flooded.

BuzzFeed identified the person behind those tweets as Shashank Tripathi, a hedge fund analyst and the campaign manager of Christopher R. Wight, this year’s Republican candidate to represent New York’s 12th Congressional District. (Mr. Tripathi has since apologized and resigned from the campaign.) Because his Twitter feed was followed by a number of New York-based reporters, the misinformation spread quickly, although John Herrman, also writing in BuzzFeed, suggested that “Twitter is a Truth Machine,” writing that “during Sandy, the Internet spread — then crushed — rumors at breakneck speed.”

Margaret Sullivan, the public editor of The New York Times, said in a message on Twitter that whatever the quality of the feed at any given moment, it was riveting: “Impossible to tear one’s eyes from, with occasional nuggets of helpfulness amid constant stream of flotsam and jetsam.”

The day after the storm, Twitter shook off much of the earnestness and reverted back to its snippy self, although the storm’s death toll and the quest for resources made it a more serious village common than usual. In an e-mail, Peter Kafka of AllThings D, considered the value of Twitter in a big news event by running it through the way-back machine.

“Would it have been better during 9/11 if we had Twitter?” he wrote. “Plenty of bad and good info spread that day, by mouth, web and TV. My hunch is Twitter would do the same. The difference? Twitter allows my friends/like-minded people/people I like to feel a bit more connected. And that’s a lot better than less connected.”

Calling it a “pop-up town square” for the affected area, @editorialiste said in a message on Twitter, it was “a great place to laugh, cry, argue, sympathize together.”

Kurt Andersen, radio host and writer, said that the combination of utility and sociability made Twitter a remarkable informative shelter during the storm.

“I’ve never liked or used the word ‘community’ about people communicating online, but the Sandy conversations seemed worthy of the word, actually communal,” he wrote. “And given the circumstances, it really could’ve only happened online.”