Property Owners Advised To Retain Flood Insurance Even With Recent Changes

Property Owners Advised To Retain Flood Insurance Even With Recent Changes
Property

OCEAN CITY — Ocean City officials last week adopted the new flood insurance rate maps and the associated changes to the town’s code, but not before raising concerns the relaxed requirements could result in many property owners simply not renewing their policies.

The Mayor and Council on Thursday night, Feb. 19, adopted the new maps created by FEMA during a lengthy review process of the entire resort. FEMA has completed its flood insurance study for Ocean City and has redrawn the maps that designate which areas are at the greatest risk for flooding during coastal storms and other high tide events.

Changes to the maps impact the city’s Flood Damage Prevention Ordinance, and by association, the town’s building code. The flood maps had not been updated since 1986, and largely because of the ongoing beach replenishment, the creation of the dune system, the construction of the sea wall along the Boardwalk and the town’s own stringent building codes on elevation, the new maps significantly relax the flood insurance requirements for most resort properties.

For example, the 1986 maps had most oceanfront properties in the V-Zone, which had the highest risk and, therefore, the highest flood insurance rates. However, the new FEMA maps adopted by the council last week take most oceanfront properties out of the V-Zone. In fact, all oceanfront properties south of 143rd Street are no longer in the most onerous V-Zone.

In the new maps, almost all Ocean City properties are no longer in the 1 percent or 100-year flood zone with a mapped Base Flood Elevation. As a result, the requirements for flood insurance will be relaxed with lower rates for most property owners and no requirement for flood insurance at all for many others. In the past, mortgage companies and insurance companies required flood insurance, but with the new maps taking many resort properties out of the highest risk categories, that will no longer be the case for some.

Many resort property owners will see their flood insurance rates reduced significantly because of the map changes. Some at-risk bayside properties will likely see their rates increase, but many in the resort may drop their flood insurance policies altogether.

“Most will see a decrease in their flood insurance rates,” said City Engineer Terry McGean, who presented the flood map changes to the Mayor and Council last week. “Those in some designations will likely see an increase. If you live on a barrier island, it behooves you to get flood insurance.”

In short, the new FEMA maps will result in lower insurance rates for many and no requirement to even carry flood insurance for others.  With the relaxed maps, mortgage companies might not make resort property owners maintain flood insurance.

The adopted maps will maintain the town’s stringent building codes in terms of elevation for at-risk properties. Those building standards, along with beach replenishment and the dunes, for example, have protected Ocean City properties during storms when other resort communities without similar standards have seen devastation from storms.

“People invest in Ocean City because we have a higher standard,” said Councilman Dennis Dare. “If we didn’t have those higher standards, you would see houses fall into the ocean during a big hurricane.”

Dare said by adopting the maps, the town will enjoy reduced flood insurance rates while maintaining its same stringent building standards.

“It sounds like the best of both worlds,” said Dare. “We get reduced rates and we get to keep the same elevation standards.”

However, later in the meeting, Reese Cropper III, president of the Insurance Management Group (IMG), warned the map changes and the perceived insurance rate reductions were misleading and voiced concern many who likely need flood insurance simply will drop their policies because of the changes.

“The flood maps are a big concern to me,” he said. “I’m seeing some assumptions by officials and the public. People are making the assumption this will lead to cheap insurance. It will not.”

Cropper warned officials to not simply convey the message the new FEMA maps and the associated flood insurance requirement changes signal a reduction in the risk threat during storms.

“I’m afraid a lot of people are not going to pay the premium and renew their policy,” he said. “I think we need to be careful about what information we put out there. I think we need a public service message.”

Cropper said it is human nature to not pay for something if it is not required, even if it will likely be needed someday.

“I know the consumer will not pay for these flood premiums if they don’t have to,” he said. “They’ll say ‘when was the last time we needed it?’”

Mayor Rick Meehan agreed the town had to continue to urge property owners to have sufficient coverage despite the relaxed rules.

“We need to encourage them to continue to buy flood insurance,” he said. “We need to get the word out in our newsletter. We live on a barrier island and we all need to have flood insurance.”