The Block Island Times

Insurance rates in flood zones to rise

101 policies affected
By Gloria S. Redlich | Sep 25, 2013

Recently, some 25 islanders gathered at Town Hall to hear Michelle Burnett of the Rhode Island Emergency Management Agency (RIEMA) discuss changes to the National Flood Insurance Program (NFIP) that are likely to raise rates significantly.

The agency, Burnett told the crowd, “wants to get information out to people so they’re not broad-sided.”

First, a little background: Burnett said the NFIP originated in 1968 after significant storms were recorded necessitating the federal government to step in to map flood-prone areas and to make insurance available to all members of a community that met flood plain management criteria and established minimum standards for new construction.

Prior to 1968, most homeowners’ insurance policies did not cover flood damage — or if they did, the rates were cost-prohibitive. Consequently, those who found their property flooded “often found themselves financially devastated and unable to rebuild,” said Burnett. The NFIP, she said, was created “to fill that gap.”

The mapping, Burnett said, helped to identify “higher, medium and lower risk areas.” Owners of existing homes and businesses did not have to rebuild according to higher standards, and many received subsidized rates that did not accurately reflect their level of risk.

In addition, as initial flood risk was updated by NFIP, a number of properties built in compliance with existing standards received discounted rates in areas in which flood risk was revised. This “grandfathering” prohibited rate increases for existing properties even when flood risk increased.

Burnett explained that the Biggert-Waters Flood Insurance Reform Act of 2012, passed into law the same year, extended the NFIP for five years, but also required major program changes. The legislation, she said, will require the NFIP to raise rates to more accurately reflect “the true risks and costs of flooding.” Biggert-Waters was passed primarily to keep the NFIP sustainable, Burnett said, and “to make the program financially sound and stable.”

Here’s the essence of the changes: Individuals with a mortgage backed by the federal government whose structures are in hazardous areas are required to have flood insurance, which may be purchased, Burnett added, through a local insurance agency. She added that all primary residences — including historic buildings — built prior to the initial Flood Insurance Rate Map (pre-FIRM), i.e., before April of 1985, would be likely to see a 16 to 17 percent increase effective Oct.  1, 2013. Part of the intention of Biggert-Waters, Burnett said, was “to eliminate subsidies for pre-Firm structures.”

Who is affected by subsidy changes?

Noting that 43 percent of the policies in Rhode Island are subsidized, Burnett itemized who would be affected by the subsidy changes. She listed non-primary residences, commercial properties and properties with repetitive claims as all subject to potential 25 percent increases each year—until they provide elevation certificates, indicating they know their risks. She added that the government is recommending that individuals submit these certificates.

Burnett pointed out that all 39 communities in Rhode Island were participating in this flood insurance coverage — with 16,135 policies having been written in the state. She noted that Washington County had 5,867 policies, Providence County had 2,700, and on New Shoreham there were currently 101 such policies in force.

The zones to be particularly aware of on island, Burnett said, were the V-zone, an area of the highest risk (with 10 local policy owners), the A-zone, an area directly adjacent to a V-zone, considered relatively high risk (with 47 policy owners), and the X-zone, an area outside the flood zone (where there are 44 policy owners). To see where these zones are, please visit and search for the report that was created by the New Shoreham Natural Hazard Mitigation Committee in 2006.

The cost of the average premium, Burnett said, was approximately $1,300. “Fortunately,” she added, “the island has a lot of elevation.”

In terms of building new structures, addressing what can be done to lower costs, Burnett said, “Elevate! Elevate!” However, she acknowledged that going higher can often conflict with height restrictions prescribed by municipalities. At times these heights may be “bumped up,” she said.

“What’s important to remember is to talk with an insurance agent because in building or rebuilding, going higher reduces flood risks,” Burnett said, noting there were also mitigation grants available through the federal government. She added that FEMA could also “help consumers lower flood risks and flood insurance premiums through a community rating system, various mitigating grants and technical advice on building or rebuilding to mitigate future flood damage.”

After a lively question and answer session, residents eager to learn which zone they were in clustered around a table on which Burnett had laid out maps indicating elevations and risk levels.

Finally, Burnett said “The most important thing would be to know your own risk.” She reiterated that those with questions or concerns should contact a local insurance agent to learn more.

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