Lee, cities get 121 days to fix FEMA issues, maintain 25% discount

Lee County property owners will continue to get a 25% discount on their flood insurance premiums for the time being after the Federal Emergency Management Agency gave the county another extension to correct outstanding issues that led to a rating downturn in March.

A FEMA spokesperson, in an email to the Business Observer, says Lee and four of its localities have begun “a probation process” to make sure they have the “support they need" to be compliant with the National Flood Insurance Program.

As part of that process, the localities have 121 days to fix “remaining deficiencies.”

As that process unfolds, policy holders will be able to maintain their regular flood insurance policies at a discounted rate.

“Our goal during the next few months is to continue meeting with each community and making progress to ensure standards of the program are being met so they are more resilient to future disasters,” says the FEMA spokesperson.

The county, in a July 19 statement, says that it has until Nov. 18 to work on a plan to address the ongoing issues.

The problem began March 28, when FEMA officials notified Lee, Bonita Springs, Cape Coral, Estero and Fort Myers Beach of a ratings downgrade that would raise resident’s flood insurance premiums by 25%.

The county’s current rating is a Class 5 in the National Flood Insurance Program's Community Rating System, which qualifies policy holders for the 25% discount. It’s at risk to be downgraded to Class 10 which has no discount.

According to FEMA, the rating downgrade was the result of large amounts of unpermitted work, lack of documentation and a failure to properly monitor activity in special flood hazard areas, including substantial damage compliance.

Officials in the localities — despite letters from FEMA showing the contrary — say they were never told of the findings and questioned FEMA’s motives.

Since the initial uproar, the sides have been working to resolve the issues in order to maintain the rating — and the discount that comes with it — by Oct. 1.

In its July 19 statement, Lee says it joined the CRS program in 1991 and as recently as February 2023 had maintained its Class 5 rating. Being notified of the downgrade started “months of work on the part of FEMA and Lee County to clarify post-Ian activities and provide documentation requested by FEMA.”

That documentation, the county says, was submitted June 3.

“We believe this is a positive step toward keeping the CRS rating for our unincorporated Lee County residents while we continue to remediate outstanding issues with FEMA,” Lee County Manager Dave Harner says in the statement.

“Essentially the notification today provides the county an extension to further clarify our processes and preserve the CRS rating in the future.”

The key to FEMA’s rating system is that localities are the one that must remain in compliance in order for policy holders to keep the discounts.

In April, a FEMA spokesperson said the discount incentivizes localities to put additional flood protections in place in order to protect people and property in the event of a flood.

The NFIP was created in 1968 to provide insurance to help “reduce the socio-economic impact of floods,” FEMA says on its website. The program sells the insurance policies to property owners, renters and businesses through a public-private partnership between the government and insurance companies.

The agency says policies are sold and serviced by more than 50 insurance companies and NFIP Direct.

According to Florida’s Division of Emergency Management, there 1.7 million NFIP policies in place in the state.