Insurance Service Representative Discusses Flood Policies With Council
Presentation was made at Thursday's meeting.
Sherry Harper of Insurance Services Office, Inc. presented to City Council on Thursday strategies that the city could implement to attempt to save residents on their flood insurance payments.
Some of the best ways for the city to see a decrease, she said, would be to raise homes to two feet above base flood elevation in an ordinance, as opposed to the current figure of one foot above. Base flood elevation is the height at which storm waters have a one percent chance of reaching in any given year.
She also suggested that the community continue with outreach and educational programs with regard to flooding. Harper also offered her continuing assistance as the city attempts to find ways to make changes that could potential save residents money on insurance costs.
"We will guide you through the process," she said. "We stand ready to help you achieve the goal if that's your wish."
Her suggestions centered around an attempt to bring the city's Community Rating System designation from a Class 7 to a Class 6, a designation made by FEMA, to which Harper's company makes its recommendations.
As a Class 7 city, residents are already saving 15 percent on flood insurance—each class, starting with nine as the lowest and one as the highest, represents a five percent decrease in flood insurance costs for residents.
To get to a higher class level, a city must earn 500 points. Currently Ocean City stands at 1,687 points following an evaluation that started in 2010 and ending in 2011. To get to Class 6—the level at which residents would see an additional five percent savings, the city would need to reach 2,000 points.
According to Harper, the monies saved could be substantial. Currently residents are seeing approximately $112 per year in savings, she said, which for a city with more than 17,000 insurance policies, is a total of $1.9 million in savings for Ocean City homeowners. At Class 6, the savings would jump to $150 per policy, which would be approximately $2.57 million in savings for the city as a whole, she said.
"You would effectively be doing something positive for nearly all of your residents," Harper said.
There are many ways to earn points, but the "big ticket" items, as Harper called them, are the raising of homes—which was already suggested to the Planning Board earlier this year—and outreach.
An ordinance calling for an additional one foot above base flood elevation could give the city 125 points, cutting the gap between 15 percent in savings and 20 percent in savings by one-third.
Eric Sauder
4:54 pm on Friday, August 24, 2012
Where to begin? This is a rather complex issue and I can’t fault John for missing the subtleties. He did a reasonably good job of it for just getting his feet wet. As former 4th ward councilman Roy Wagner once stated “the devil is in the details.” I’m going to try to set the record straight.
Base flood elevation + 2 (feet) was proposed as a way of saving taxpayers hundreds if not thousands of dollars in flood insurance premiums. The way it would do this is thru generating enough points to qualify for a class 6 rating instead of the current class 7 rating (the lower the rating the better.) The insurance premium savings that could be realized by attaining a class 6 rating would amount to a 5% discount on your insurance premium. If you’re now paying $2,000 / year in flood insurance premiums you could expect to save $100 IF we qualify for a class 6 rating. That rating is maintained by the Community Rating System or CRS.
Currently, as reported, we’re at 1,687 points. We need to get to 2,000 points to jump to a class 6 and qualify for that discount. We could garner up to another 125 points by going to BF 2. If you do the math you can see that even with those 125 points we’ll still be considerably short. (continued)
Eric Sauder
12:17 am on Saturday, August 25, 2012
The Gazette reported that BF + 2 would get us 225 points (or some percentage of those points ... see below.) Since I wasn't taking notes I'm not sure which figure is accurate.
Eric Sauder
1:04 pm on Saturday, August 25, 2012
Not that this post has generated a lot of interets but I feel compelled to clear up the disparity in the numbers. The number of points (225) stated in the Gazette includes the number of points we received for going to base flood + 1 (feet) and the number of points we could receive for going to base flood + 2. We're already at base flood + 1. The number of points we could then capture for going from BF 1 to BF 2 is 125. As it rurns out I used the correct number.
John Arthur
1:14 pm on Saturday, August 25, 2012
Hey Eric,
It would get 225 points, but since the current BF + 1 already accounts for 100 points, the difference would be the +125.
That's what I've got in my notes.
Eric Sauder
1:45 pm on Saturday, August 25, 2012
You got it John. You were right. (Thanks for taking notes :)
Eric Sauder
5:16 pm on Friday, August 24, 2012
But the problem is we’re not going to receive all 125 points unless ALL structures are included in BF 2 including commercial structures (which as of now are excluded). Ms. Harper stated that they would apply a 50% rule in that case, yielding not 125 points but 75 points. There are other factors that will also lower the number of points available, including whether mechanicals (duct work etc.) are above BF 2. The simple truth of the matter is we’re not going to receive all 125 points even is we do adopt BF 2.
As for what Ms. Harper recommended, she stated that we should do the low impact stuff before taking on anything major like BF 2 … that we capture any points available for which we already qualify but for which we have not, as yet, been credited. When asked by several council members if it wouldn’t make sense to go to BF 2 now (even though it wouldn’t give us the points needed to reach the next threshold) her answer was that we should consider going to BF 2 as a way of protecting structures from the risk of flooding.
I realize this may have all been a little abrupt for some our council members, but the question is, why are they clinging to BF 2 as a panacea for reducing insurance premiums when it clearly will not? We’re still going to be hundreds of points short. The answer could lie in other provisions of the proposed BF 2 ordinance which have NOT been identified. (continued)
Eric Sauder
6:06 pm on Friday, August 24, 2012
There are at least two provisions in the proposed ordinance that are likely to increase both building height and bulk. One is that we will now use lot height instead of the center line of the street as the reference point for building height. Measuring from the center of the street gave a common point of reference and yielded uniformity in height The problem is exacerbated where the center line of the street (the old point of reference) is low compared to base flood elevation (in neighborhoods like Merion Park for example). The other is in changes in the relationship between lot width and building height. The short of it is that the height of new buildings under the provisions of the proposed BF 2 ordinance could be considerably higher than the existing structures. In my conversations with 4th ward councilman Pete Guinosso he calculated that the offset could be as much as 6 to 8 feet in some areas of town.
I’m hogging up a lot of space here. I hope to develop this farther in a letter to the newspapers.
John Arthur
2:44 pm on Saturday, August 25, 2012
Thanks for all the extra information and thoughts, by the way.