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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——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 August 25, 2012 at 04:17 AM
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 August 25, 2012 at 05:04 PM
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 August 25, 2012 at 05:14 PM
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 August 25, 2012 at 05:45 PM
You got it John. You were right. (Thanks for taking notes :)
John Arthur August 25, 2012 at 06:44 PM
Thanks for all the extra information and thoughts, by the way.

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