Federal grants to owners of properties damaged by superstorm Sandy come with a catch for those in flood zones without flood insurance: There will be no disaster aid next time unless they buy a policy.
Homeowners without the insurance who were flooded in the Oct. 29 storm and got a check for repairs from the Federal Emergency Management Agency had $600 automatically deducted from their grant.
The deduction pays for three years of enrollment in the National Flood Insurance Program -- the federally run primary provider of residential flood insurance nationwide. It provides $31,900 maximum coverage that can be used for repairs or contents, although homeowners can purchase more coverage.
But under the policy, set in 1994, once the three-year coverage expires, homeowners are expected to purchase standard flood insurance policies or they will not be eligible for disaster-related federal grants for property damage in the future.
"These people are retirees or they have paid off their mortgage; they could be landlords without mortgages or condo complexes or just be a wealthy person and for whatever reason don't carry flood insurance -- it's unfortunate when disasters strike and those without coverage are affected," he said.
Flood insurance is mandatory for homeowners living in a FEMA-mapped 100-year floodplain if they have a mortgage from a federally backed or regulated lender. Yet many homes don't have it -- and quantifying them is difficult.
In most of the South Shore areas seriously affected by Sandy for example, those with flood insurance make up at most between 15 percent and 50 percent of residents, according to an analysis conducted in November by Carolyn Kousky and Erwann Michel-Kerjan with the University of Pennsylvania's Wharton Risk Center.
The researchers found that, along the entire New York coast, only in a few communities did more than 30 percent of property owners have flood insurance.
Even in areas heavily flooded during Sandy, the percentage of flood insurance policy holders remains fairly low despite the mandatory requirement for those with mortgages, Kousky and Michel-Kerjan wrote.
Other researchers have identified many reasons why people don't get flood insurance, Kousky and Michel-Kerjan say. Homeowners dismiss the risk, are overly optimistic they won't be victims of a disaster or they let their flood insurance lapse because they haven't needed to file a claim over a number of years, they said. Some do not realize their homeowners policy does not cover floods, while still others face budget constraints and view the insurance as the least necessary of their necessities.
FEMA officials offered another insight into residents' reluctance to buy flood insurance, pointing to opposition in southeast Nassau to the September 2009 update to the FEMA flood map. Of the 4,500 building structures in that area whose owners sought to be excluded from the zone -- and therefore the need for flood insurance -- there are just 736 national flood insurance policies.
"It's highly likely that there are people in this group who should have been carrying insurance who are not," said Don Caetano, a FEMA spokesman.
"It's hard to know how many of the 4,500 are homeowners without a mortgage, as opposed to those who would be required to carry flood insurance," Caetano said. According to past experience, he said, it costs an average of between 25 percent and 30 percent of the value of an entire home to fix a flooded first floor.
Mike O'Neil, a Massapequa resident whose family home sustained severe flood damage on its first floor, has flood insurance and said the mandatory requirement made sense.
"It seems only fair to all of us as taxpayers that if you're going to take federal aid, it's your civic duty to contribute back into the system," he said from the mobile home he has parked on his West Shore Drive property as repairs continue to his house.
"If there's something Sandy should make clear, there's a risk and we'll all have to share that responsibility if you're going to benefit in the future."
FEMA housing assistance grants*
LONG ISLAND: $208 million for 30,000 households
NASSAU COUNTY: More than 30,000 Long Island households hit hard by superstorm Sandy have secured $208 million in federal emergency aid -- more than the amount approved for the entire state of New Jersey.
Federal Emergency Management Administration housing assistance grants in New York State reached $508 million Sunday, the agency's most recent figures show.
FEMA also has agreed to millions of dollars in grants in New York City. Residents of Queens have been approved for $134 million in aid. In Brooklyn (Kings County), the amount has reached $102 million. Residents of Richmond County, which encompasses hard-hit Staten Island, have been approved for $55 million in grants.
Another $4.4 million in payments has been approved for residents of Manhattan (New York County), where floodwaters inundated low-lying areas of the borough's southern tip. FEMA also approved about $1 million in grants for residents of the Bronx and $364,000 in Westchester County.
*approved as of Sunday