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A Grant Program for Some Storm-Weary Property Owners

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Homeowners in New York, New Jersey and Connecticut whose homes were badly damaged by Hurricane Sandy may want to consider whether filing a claim for repairs under their flood insurance policies is their best option.

In particular, property owners who had damage from last year's Hurricane Irene, and may face another round of insurance claims from Sandy, may have had enough and be ready to move to a less flood-prone area, said Marshall Gilinsky, a lawyer with Anderson Kill & Olick in New York.

In that case, they should look at the Hazard Mitigation Grant Program, which is made available in major disaster areas by the Federal Emergency Management Agency.

The National Flood Insurance Program is intended to compensate homeowners and help pay for repairs. But the hazard mitigation program aims to help communities buy out property owners and help them rebuild or buy on higher ground; the home is demolished and the lot left vacant.

The program uses primarily federal funds and is coordinated through the city or town where the property is located. The idea is to help communities remove structures from risk-prone areas. The municipality agrees to keep it undeveloped in the future.

For details of the program as it relates to properties damaged by Hurricane Sandy, homeowners can see state-specific announcements from FEMA and from their state government, or find local disaster assistance locations from FEMA's disaster information website.

In general, properties may qualify if they are in a high-risk flood zone and if they suffered "substantial" damage from the storm — generally meaning the cost to repair is more than 50 percent of the fair-market value of the house before the storm, Mr. Gilinsky said. (Mr. Gilinsky became familiar with the hazard mitigation grant program while assisting homeowners in Vermont after the state was hit last year by Hurricane Irene.)

Because of the cost-of-repairs criteria, the hazard mitigation program may not be suitable for expensive second homes. But for owners of more modest primary homes that were heavily damaged by Hurricane Sandy — and might also have suffered damage from Hurricane Irene — the mitigation program may be worth considering. "This is an idea of appeal and interest for people who have been through the ringer," he said.

Would you consider relocating from a flood-prone area, if funds were made available?

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