FEMA and the National Flood Insurance Program define the V-Zone as an area that has a 1% or greater chance of flooding in any given year, with these properties averaging a 26% chance of flooding over a 30-year period. Based on this definition and historical data, in 2009 FEMA issued an update to its policy regarding new construction and reconstruction in a V-Zone. The V-Zone already had special construction design requirements for structures located within its borders; however, the new regulations go a step further.
Under the updated policy, FEMA cannot fund any new construction in a V-Zone. This restriction includes the replacement of structures and/or facilities that have been totally destroyed by a disaster. A structure or facility is considered to be totally destroyed when the repair costs are equal to, or exceed, 90 percent of the cost to replace that facility or structure. Even if the value of the damages to a structure exceeds this “90% Rule”, FEMA can no longer fund the new construction in a V-Zone.
If the repair costs fall between 50 and 90 percent of replacement costs, FEMA may still fund substantial improvements to a damaged V-Zone property. These funds can be applied to repairs, improvements, and reconstruction of the structure/facility. Reconstruction may include purposeful demolition and rebuilding in the same footprint, as long as it does not exceed 110% of the original size of the building. (Under FEMA’s Public Assistance Program, reconstruction is considered as a form of repair project and not as new construction.)
This summary of the update to FEMA’s V-Zone construction policy is not all-inclusive and is only intended as an overview. For a more thorough understanding of how this policy updates affects you, contact one of our Disaster Recovery Consultants at Adjusters International.
