• October 22, 2019

Ocean City group joins insurance fight - Ocean City Sentinel: News

Ocean City group joins insurance fight

Flooding premiums are expected to skyrocket

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Posted: Thursday, October 10, 2019 9:48 am

OCEAN CITY – A local flood mitigation group is joining the fight for better flood insurance premiums.

Ocean City Flooding began as a local group of citizens concerned with flooding and the city’s flood mitigation program, according to organization chairperson Suzanne Hornick. 

Hornick announced Ocean City Flooding will become a chapter of Higher Ground, the largest flood survivor network in the United States.

Hornick said the Federal Emergency Management Agency (FEMA) removed its subsidies for flood insurance known as the National Flood Insurance Program (NFIP). 

She said flood insurance premiums will rise in the near future, leaving homeowners to pay larger amounts and possibly prohibiting new homeowners from purchasing property in Ocean City, she said. 

“FEMA s pulled out of the flood insurance subsidies. After all of these years of them saying ‘go buy a house and we’ll subsidize your flood insurance,’ they’re saying ‘we’re not doing that anymore.’ People are required to have flood insurance for a lot of reasons. Flood insurance premiums are going to go up exponentially every year,” Hornick said. “We are very concerned that they’re going to go up to the point that people can’t afford to live in their homes. They’re already high but getting higher. Everybody’s seen an increase this year and over the next four years it’s going to get worse.”

The changes to FEMA would potentially double insurance rates over the next four years, she said.

Congress created the NFIP in 1968. Flood insurance was subsidized to encourage homeowners when the program initially started. Every four years Congress needs to reauthorize the NFIP. 

However, the NFIP is over $25 billion in debt. 

To deal with this debt, the House introduced H.R. 3167, the National Flood Insurance Program Reauthorization Act of 2019 in June. Sponsored by Rep. Maxine Waters (D-Cal) the legislation includes 18 percent to 25 percent compounded yearly increases for flood insurance premiums. The premiums would double every three to four years. 

Another bill, H.R. 3872, sponsored by Rep. Frank Palone (D-NJ), is the National Flood Insurance Program Reauthorization and Reform Act of 2019. Under this proposal, premium increases are capped at 9 percent compounded yearly increases. 

Normally, Congress would have to renew the NFIP on Sept. 30. On Sept. 27, President Donald Trump signed legislation passed by Congress that extends the NFIP’s authorization to Nov. 21. 

Congress must now reauthorize the NFIP by 11:59 p.m. on Nov. 21. 

According to the FEMA website, should the NFIP’s authorization lapse, FEMA still has authority to endure the payment of valid claims with available funds. 

“However, FEMA would stop selling and renewing policies for millions of properties in communities across the nation,” according to FEMA. “Nationwide, the National Association of Realtors estimates that a lapse might impact approximately 40,000 home sale closings per month.” 

Hornick said the extension allows Ocean City Flooding to lobby their representatives. She said her group wants to meet with Rep. Jeff Van Drew (D-NJ) to discuss the proposed legislation. 

Ocean City Flooding supports the Pallone bill over the Waters bill, saying it “makes more sense for homeowners.” 

“People can’t afford these skyrocketing insurance rates, nor can they afford to raise their homes to make the insurance affordable,” Hornick said. “It’s a national fight. It’s not just Ocean City.”

Hornick said the rising premiums will price people out of their homes. She added it costs a quarter of a million dollars to raise a house in Ocean City. 

“We’re worried that it’s going to get to the point where the flood insurance premiums are more than what the house is worth,” Hornick said.

Ocean City residents are familiar with frequent flooding, leaving impassable streets at the mercy of encroaching water. 

Hornick said this daily flooding, which residents experienced for the last 10 to 15 years is due to overdevelopment and lack of properly functioning stormwater infrastructure. 

“The goal of our group is to learn where our flooding is coming from and do what we can to get the city to do their part to mitigate and remediate what can be. We can’t stop a hurricane from coming but we certainly can make sure our infrastructure is properly functioning,” Hornick said.

Expanding their advocacy, Ocean City Flooding joined Higher Ground, the largest flood survivor organization in the country.

Higher Ground provides technical assistance to help members understand local flood risks and potential solutions, training and seminars to reduce flood risks, and information on legislation to help communities with flooding and climate resilience. 

Harriet Festing, manager of Higher Ground, said the organization’s common concerns are a combination of a lack of investment in stormwater infrastructure, 

development that is pushing more stormwater onto existing homes, and global warming.

 She said while her group supports Pallone’s bill, H.R. 3872, there are lingering problems not present in the legislation. 

 “Rates are going to go up to reflect the increasing risk, but the rate of those increases, particularly for low income residents is a major concern,” Festing said. “We’re very concerned about transparency and disclosure even though flood survivors themselves would be impacted if there were stronger laws requiring homeowners to disclose that they’re flooding. We do find that most of our members are appalled at the thought that people could buy flooded homes.”

Flood mapping, which indicates which properties and areas are in flood plains and can dramatically affect flood insurance premiums, is not up to date, she said.

“We’re concerned about the mapping. We’re concerned that there is a lot of money and effort should be done to ensure those flood maps are accurate because they strongly influence the mitigation programs, the insurance, the insurance premiums,” Festing said. “It’s not just at the federal level, but down to the state and local level. If you are in the floodplain, then certain programs are accessible to you and if you’re not, then they’re not accessible to you. And yet we know those flood maps are completely inaccurate.”

Enforcement of federal laws around the NFIP is another of Higher Ground’s concerns, Festing said.

“From what I’ve heard the city is taking some action but I’ve not heard that it is really taking seriously the peril in which residents are going to be in as the result of sea level rise,” Festing said. “The NFIP could be such a tool that really start to push cities like Ocean City to do substantially more.” 

Ocean City’s Financial Management Director Frank Donato said the city has numerous flood mitigation efforts, including involvement in the Community Ratings System (CRS). 

The CRS is an incentive program that encourages floodplain management activities that exceed minimum NFIP requirements. 

Property owners receive discounts to their flood insurance premiums based on the amount of floodplain management activities the city implements. 

The system is ranked from 1 to 10. For every successful activity, the city receives credit points. Hit 500 credit points, and the city advances to Rate Class 9 and homeowners receive a 5 percent discount on flood insurance. Earn 1,000 credit points and the city reaches Rate Class 8 and earns a 10 percent discount. 

Earn over 4,500 credit points and the city lands at Rate Class 1 and a 45 percent discount.

Donato said Ocean City is currently at Rate Class 5 with a 25 percent discount on flood insurance. 

What can earn a city credit points? 

 “It’s a broad range of activities, anywhere from public education and outreach to information we put on our website to construction projects that improve drainage throughout town, construction of bulkheads, the pump stations, all of these different activities combined there are points assigned to each one,” Donato said.

Ocean City’s flood mitigation efforts include raising roadways, replacing drainage pipes building multiple pumping stations and conducting public meetings with residents. 

Donato called the 25 percent discount “a real savings” for property owners. 

 “If somebody were to look at a flood insurance bill you might see a gross premium of $1,000 and right underneath that you see CRS discount for your city that participates in the program and you’ll see minus 25 percent and you’ll see minus $250 and the net bill you pay to your insurance office is $750,” Donato said.

The city needs to participate in more flood mitigation activities, he said. 

 “It’s more important now than ever to continue our participating and try to get the highest level we can to try to offset some of these increases in flood insurance,” Donato said. 



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