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Hey everyone, with Hurricanes Helene and Milton still fresh on everyone's minds, we're diving

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into something super relevant today.

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FEMA's 50% rule, this rule.

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It's basically the fine print of flood insurance, and trust me, you do not want to be caught

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off guard.

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No, you don't.

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Knowing how this rule works, it could save you a ton of heartache and money down the line.

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Okay, so, let's unpack this 50% rule.

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In a nutshell, if your home is in a flood zone, and the repairs from flood damage cost over

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50% of what the entire structure is worth, you can't just like patch things up, you have

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to rebuild the entire thing to current flood codes.

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And a lot of times, those codes mean elevating your house.

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Yeah, it's all part of this.

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It's part of the national flood insurance program, the NFIP, and it's all about reducing the

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chance of your home flooding again and again.

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So, it's not just about fixing what's broken, it's about preventing damage in the future.

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Exactly, and you know what, this is where it gets even more interesting.

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So, this rule might seem pretty straightforward, but the way it's actually applied can be totally

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different, like depending on what county you're in, what municipality you're in, even within

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Florida.

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Really?

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So, what you're saying is, what flies in one county could get you in trouble in the next

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county over?

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Yeah, basically.

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Wow.

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So, what are some of these like local quirks that people should know about?

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Well, let's just take for example, how they figure out your property's market value.

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Some places might just go by what the county says it's worth, but then other places, they

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might let you get an independent appraisal, and that could totally change that 50% number.

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Oh, wow.

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So, even figuring out your starting point can be tricky, depending on where you are.

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Right.

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I bet that's not the only thing that changes from place to place.

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Oh, you know it.

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Another big one is how they define substantial improvement over time.

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So, this is about like adding up all those repair and renovation costs over a certain

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amount of time.

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So, like let's say you splurged on a $20,000 kitchen remodel this year, and then next year,

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you get hit with a $30,000 flood repair bill some places.

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They'll look at that as one big expense.

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Oh, wow.

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And that could push you over that 50% limit.

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So, it's like they're playing catch-up with all your home improvement projects, like

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what you did to your house years before a flood could actually come back to bite you?

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Yeah, exactly.

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And then, just to add another layer to it, there's also the whole world of exemptions.

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So some areas, they might have special carve-outs.

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Like if you're repairing a historic home, or if you're doing specific improvements to

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prevent storm damage in the future.

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Oh, wow.

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Yeah.

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It's not like a recipe for confusion.

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You'd be following the rules in one place, and then be totally in the wrong somewhere

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else.

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That's the thing.

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Navigating this rule, it requires a little bit of detective work.

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And we can't forget about the people who try to work around the system.

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Oh, you mean like trying to slip through those loopholes we were talking about?

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What kind of things have you seen out there?

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Like, yeah, like sometimes, you know, counties might actually undervalue properties on purpose,

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just to try to help people avoid that 50% trigger, you know.

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It might seem like they're doing homeowners a favor, but-

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But the long run.

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Right.

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They can really backfire.

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Oh, absolutely.

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Imagine this.

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Your home gets rebuilt, but it's rebuilt to a lower standard than what your insurance

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actually covers.

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And then another flood comes along, and suddenly you don't have enough money from the insurance

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to cover the repairs.

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Oh, man.

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Talk about a financial nightmare.

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So you know, this rule, it's not just about red tape.

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It's about making sure you're covered when a disaster happens.

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Yeah.

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And I think it's important to remember that this rule, it's really trying to protect everyone

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involved.

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Like, if homes aren't built to code and they keep flooding, those rebuilding costs, they

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often end up falling back on taxpayers.

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Right.

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So it's like, this rule is kind of like a financial safety net for everyone.

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Exactly.

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So with hurricanes, Helene and Milton so fresh on everyone's minds, what are some things

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that homeowners should be thinking about to make sure that they're prepared?

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Well, I always say, knowledge is power.

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The more you understand about this rule, and especially how it applies to you, the better

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off you'll be.

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So where do you even begin?

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Well, I would say the first thing is, you've got to know your flood zone.

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FEMA has flood maps, and you can also reach out to your local floodplain manager.

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But once you know your flood zone, then you'll understand what the base flood elevation is

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for your property.

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And that is the BFE.

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The BFE.

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Yes.

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Got it.

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So the BFE, that's like the minimum height your house needs to be at, to be considered

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safe.

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Yeah.

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You can think of it as like the flood safe zone.

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And keep in mind that BFE can change even within a neighborhood.

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Really?

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Yeah.

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Wow.

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Okay.

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So let's say a homeowner has damage to their home.

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Yes.

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They can't document documentation, document everything.

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So like photos and videos?

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Photos, videos.

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And you know, don't just focus on the obvious damage.

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If you can get a shot of that water line, any signs of mold, cracks in the structure,

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you want a clear record of that flood's impact.

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Without getting repair estimates.

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Oh yeah, that's a big one.

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Get those in writing from licensed contractors, and make sure they break everything down,

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line by line, so you can see exactly what's included.

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That's especially important.

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If you're anywhere near that 50% threshold cap.

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So let's say a homeowner is looking at that estimate, and it's getting close to that 50%

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mark.

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What should they do?

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Well, first of all, don't panic.

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You've got options.

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This is where being informed and proactive really pays off.

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Talk to your local floodplain manager, your insurance agent, maybe even a contractor who

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specializes in flood resistant construction.

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They can help you understand like what's possible, and how to make the best decision for your

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situation.

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So you're saying sometimes even if it costs more money up front, to rebuild to the current

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code, that might actually save you money in the long run.

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Exactly.

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Think about it.

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Future flood insurance premiums, the cost of fixing things over and over if another flood

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happens, it adds up.

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Yeah, that initial investment in resilient construction, it really can be the best decision

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you make.

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For your wallet, and for your peace of mind.

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Yes, peace of mind.

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Knowing your home is ready for anything.

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You can't put a price tag on that.

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Absolutely.

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So this 50% rule is meant to protect people financially.

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It also seems like there could be some unintended consequences.

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Right.

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Especially with all the talk about these loopholes.

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It's like these efforts to help people, couldn't have hurting them in the long run.

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Absolutely.

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Like when properties are deliberately undervalued, just to avoid the 50% rule, it can create

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a situation where people might be rebuilding to a lower standard than what their insurance

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actually covers, and then if another flood hits, they might not have enough money from

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insurance to cover the real cost of repair.

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Right, so it's like kicking the can down the road and making the problem even worse later

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on.

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It makes you wonder about fairness.

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Are these loopholes really fair to everyone?

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Or are they just helping people who already know how to work the system?

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You're a good question.

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Yeah.

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And it makes you think, could this rule, which is supposed to help people, actually end up

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changing these communities?

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Like we might see more resilient homes built above flood levels, but will people be able

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to afford to live in them?

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That's something to consider.

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It really is.

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Well, this has been a fascinating deep dive.

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We've learned so much about FEMA's 50% rule.

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And how it impacts homeowners.

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It's definitely something to be aware of.

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It is.

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And it's a reminder that when it comes to natural disasters, we need to be thinking long term

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about how we rebuild and how we create more resilient communities.

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Absolutely.

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And to wrap up today, we want to leave you with this thought.

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When you see those stories about people rebuilding after a disaster, remember, it's not just

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about putting the pieces back together.

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It's about making smart choices.

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Choices that will protect us today and in the future.

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That's it for today's deep dive.

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Thanks for listening.