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Can You Get Round FEMA’s 50% Rule? | Property Insurance coverage Protection Regulation Weblog


Legal guidelines are made to be adopted and enforced. As an lawyer, it’s unethical to advise folks to interrupt the legislation. I get quite a few calls and questions which ask me, “How do I get round FEMA’s 50% Rule?”

The reply is that everyone must adjust to the 50% Rule. A broken construction will both be decided to be above or beneath the 50% dedication below federal and state legislation.

The following query is: “Does the insurance coverage declare quantity have an effect on the 50% Rule discovering?” Technically, the reply is “no.” However, one can not defraud an insurer or the federal government. The restore estimates and pricing for the insurance coverage declare ought to be sincere. Whether it is sincere and much above 50% of the construction’s market worth, I’d counsel that it is going to be very troublesome to anticipate avoidance of an antagonistic 50% dedication.

The FEMA 50% subject is actually considered one of actual property legislation somewhat than insurance coverage protection legislation. One Southwest Florida actual property legislation agency, Grant Fridkin Pearson, famous the next:

The FEMA 50% Rule solely appears on the market worth of the construction/enchancment on the property, and never the land worth, in calculating the FEMA 50% Rule worth. Most native jurisdictions use the property appraiser’s worth for the construction/enchancment, however do permit the property proprietor to acquire their very own appraisal to find out the worth of the construction/enchancment.

Beneath is a survey of how native jurisdictions have carried out the FEMA 50% Rule:

1. The Metropolis of Naples appears on the prices for enhancements or repairs to a construction inside a one (1) 12 months interval to find out compliance with the FEMA 50% Rule. To worth the construction, the Metropolis of Naples at the moment appears on the Collier County Property Appraiser’s assessed worth of the construction and provides 20%. Nonetheless, the property proprietor has the choice to supply an impartial appraisal ready and licensed by a licensed appraiser.

2. Collier County seems to base the prices of enhancements/repairs relevant to the FEMA 50% Rule worth on every particular person allow that’s pulled as a substitute of evaluating the totality of prices over a acknowledged time frame. The worth of the construction is at the moment decided by the Collier County Property Appraiser’s assessed worth. Nonetheless, the property proprietor has the choice to supply an impartial appraisal ready and licensed by a licensed appraiser.

3. Lee County appears on the prices for enhancements or repairs to a construction inside a 5 (5) 12 months interval to find out compliance with the FEMA 50% Rule. To worth the construction, Lee County at the moment appears on the Lee County Property Appraiser’s assessed worth of the construction and provides 20%. Nonetheless, the property proprietor has the choice to supply an impartial appraisal ready and licensed by a licensed appraiser.

Native constructing officers should comply with state and federal guidelines and rules. The federal authorities just isn’t going to look the opposite method if the native constructing officers fail to comply with the FEMA 50% Rule.

I counsel policyholders involved about this subject additionally turn into very acquainted with FEMA’s Substantial Enchancment/Substantial Harm Desk Reference. I additionally encourage you to learn my prior publish on this matter: Substantial Harm and Questions About FEMA’s 50% Rule.

Thought For The Day

The federal government can not implement its mountain of legal guidelines and rules with out voluntary compliance.
—Charles Murray

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