The order by New Jersey’s governor standardizing the rebuilding codes along the state’s coast in the wake of Superstorm Sandy will help speed the process of rebuilding, but agents say property owners are just beginning to discover the implications this decision will have on their reconstruction plans.

On Jan. 24, New Jersey Gov. Chris Christie issued an emergency regulation aimed at helping property owners rebuild to a uniform standard throughout the state by adopting the Federal Emergency Management Agency’s Advisory Base Flood Elevation (ABFE) maps. The order affects 194 coastal communities in 10 counties along the New Jersey shore.

Property owners will need to rebuild to construction requirements designed to prepare for a 100-year flood and will have to adhere to elevation standards outlined under the ABFE maps—plus an additional foot to come into compliance with state law.

According to one scenario laid out by FEMA under the 2012 Flood Insurance Reform Act—which requires premiums for flood insurance to rise as much as 25 percent over the next five years—an individual could save more than $90,000 in premiums over 10 years if he or she were to build three feet above FEMA’s required specs.

Chris Grasso, vice president of Personal Lines for Liberty Insurance Associates, an agency in Millstone, N.J., says that the governor’s decision has taken any ambiguity out of the process of rebuilding: If they don’t build to FEMA’s specs, homeowners can expect to pay substantially higher premiums or be unable to obtain insurance because they have not met the minimum requirements established.

The cost of compliance will not come cheap, however, adding between $30,000 and $60,000 to the cost of rebuilding the home, according to the governor’s figures.

As the rebuilding process moves forward, property owners will have their insurance settlement and mitigation grant money from the federal government to help, but ultimately, the cost will be on the shoulders of the homeowner.

Andrew C. Harris, Liberty Insurance’s president, says that Sandy has accelerated the process of getting the ABFE maps out to the public—and that has been a headache of sorts for agents, who now will have to explain the situation to all of their clients.

Cappy Stults, owner and president of insurance agency Allen & Stults in Hightstown, N.J., says his firm began initiating conversations about the process long before the governor’s announcement. Since Sandy he has been advising homeowners to wait for decisions at the federal, state and municipal levels before deciding to make repairs or rebuilding—and since flood maps are subject to change, Stults says he is urging clients planning to rebuild to do so at an elevation of three feet above the ABFE maps.

He also tells them not to rush; this summer, he says, needs to be written off as a loss.

“There are those homeowners with rentals who want to get their houses ready for the summer of 2013,” says Stults. “I tell them: The summer of 2013 is lost. Think about the summer of 2014.”

Special Reports /

In N.J., Rebuilding to Code Carries Big Premium Implications

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