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FEMA raising flood insurance rates in Southwest Florida, blames bad Hurricane Ian rebuild

An aerial view of damaged homes.
Al Diaz
Miami Herald
An aerial view of the damaged homes from Hurricane Ian seen in the vicinity of Fort Myers in September 2022.

Flood insurance rates are rising for Southwest Florida residents — as much as 25% — after the Federal Emergency Management Agency accused some communities of improperly rebuilding after Hurricane Ian.

On Thursday, FEMA representatives told Lee County and four municipalities within it that residents were losing their long-held flood insurance discounts because they didn’t follow the federal agency’s rules on rebuilding after a storm.

Lee and the four municipalities called the decision a “late, devastating blow” to their community in a press release issued Friday evening and said they had no idea this was going to happen. They said they were looking into legal recourse and demanded that FEMA allow them to appeal the decision.

“For the federal government to have made this decision without any prior discussions seems punitive,” Lee Board of County Commission Chairman Mike Greenwell said in a statement. “Ian was the third costliest hurricane to hit the United States, and many of our residents are still reeling financially from its impacts.”

In the statement, Cape Coral Mayor John Gunter called the move a “unilateral decision” by FEMA that harms his city’s residents and asked for it to be reversed.

“The timing of this decision after our community suffered a devastating Category 5 hurricane is just wrong. Make no mistake — FEMA is the villain in this nightmare,” he wrote.

The rollback affects more than 115,000 flood insurance policy holders in Lee County, Cape Coral, Fort Myers Beach, Estero and Bonita Springs. According to FEMA data, the average policy holder could see a $300 annual increase to their flood insurance premium starting Oct. 1.

Each of the communities had a 25% discount on flood insurance policies, except for Estero, which had a 20% discount. Collectively, FEMA said, the discounts saved the community tens of millions of dollars a year. Those are now gone, with no chance to earn them back until at least April 2026.

READ MORE: The best upgrade to reduce a home’s hurricane damage? A newer roof, FEMA study finds

The problem, FEMA said, centers on how many homes were destroyed by the storm and what happened to them afterward.

To stay in the national flood insurance program, communities must agree to a few ground rules. One is that if a storm causes damage worth at least 50% of the value of a property — known as substantial damage — it must be torn down and built up to the newest building codes.

That’s an expensive proposition that most Floridians struggling in the wake of a storm’s devastation are eager to avoid, but the rule is designed to keep properties in harm’s way safe and to ensure the federal government isn’t stuck footing the bill to rebuild them again and again.

After Hurricane Ian struck in 2022, some communities in Southwest Florida were quick to try and find ways to help residents avoid rebuilding, and thus, elevating, their properties. Cape Coral, one of the communities losing its flood insurance discount, rolled back some of its stricter rules around rebuilding to help residents avoid hitting that 50% line.

Lee County, also targeted in the rollback, had a messy, public argument with FEMA when it tried to change the calculation to get to 50% to raise the value of some of its properties, helping more residents avoid elevating. Lee County won that argument, according to reporting by the News-Press.

But the news about flood insurance rates, delivered late Thursday, came as a shock to the communities, they said in the press release.

"FEMA has provided no written notification or documentation outlining any specific details that would lead to this sudden rating change, which would take effect Oct. 1,” the statement read.

The Miami Herald requested comment from each municipality on Thursday, as well as from the state’s Division of Emergency Management, but none replied.

FEMA said the problems began shortly after the storm, when federal teams visited the communities hit the hardest and looked at the properties they thought were most likely to be substantially damaged, including older homes built in flood zones, some with previous flood damage.

"What the team found, unfortunately, is there was a lot of unpermitted work, lack of documentation,” said Robert Samaan, the regional administrator for FEMA’s Region 4, including Florida. “It was just a failure to properly monitor the activity in the special flood hazard area.”

He said the communities could not or did not provide FEMA with the number of homes that were substantially damaged by Hurricane Ian and how many were properly elevated to the new code.

FEMA shared with the Herald three letters it sent Lee County in 2023 — one in February, one in June and one in December — asking for information on the number of damaged homes and warning that not providing the information could result in the county losing its flood insurance discounts.

The December letter specifically requested the status of 590 properties before Jan. 12, noting the county would otherwise lose its flood discounts. FEMA informed Lee County about the loss of discounts on Thursday.

“Nobody wanted to get to this point, but unfortunately this is where we’re at with this,” said Samaan, the FEMA regional administrator.

If Lee and the other municipalities don’t proactively work with FEMA to address these issues, he said, they could be kicked out of the flood insurance program altogether. Each policyholder would have to pay a $50 surcharge, and no new flood insurance policies could be written for the area. Disaster assistance after a hurricane would also be limited.

“We’re not putting them on probation just yet,” Samaan said. “What follows is we’ll be working with these communities. If they do their remediation plan, if they work with us, if they fix the deficiencies, then they do not have to be put on NFIP probation.”

It could be a long road to getting the discounts back.

Jason Hunter, chief of the Floodplain Management and Insurance Branch of FEMA’s region 4, said the earliest the communities could get back into the discount program, the community rating system, would be April of 2026. The system gives out heftier and heftier discounts to communities who go above and beyond the basic building code to protect their communities from floods.

Cities do things like offer flood maps on their website, design better stormwater protection systems or provide customized flood-risk data to residents to earn points toward a discount. Miami-Dade County recently earned a Class 3 rating, which is on a scale from 1 to 10, earning its 100,000 policyholders a 35% discount.

Pinellas County now leads the state with a Class 2 rating, earning a 40% discount for its policyholders starting April 1.

In Lee County and the other four municipalities, their rating dropped to a 10 — a 0% discount.

The city of Bonita Springs has spent years complying with the FEMA CRS Program successfully, Mayor Rick Steinmeyer said in the press release.

“After being devastated by multiple hurricanes in recent years, the impact of this decision would be damaging to our residents. Our residents deserve the opportunity to appeal the decision. To withhold the option of an appeal is unacceptable,” he wrote.

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