Ocean City Seeks Reduction in Flood Insurance Rates for Property Owners

By Maddy Vitale Property owners in Ocean City may receive a deeper discount in their flood insurance policies by next spring, if the city gets federal approval, city officials said. City Council passed a resolution at its March 22 meeting for the first step in gaining approval from the Federal Emergency Management Agency in Ocean City’s process to achieve a higher community rating that would result in a 35 percent discount in flood insurance premiums compared to the current 25 percent discount. City Business Administrator Jim Mallon spoke briefly at the meeting about the program and the steps the city is taking. He called the resolution “an important step in improving our standing in the National Flood Insurance program.” Vince Beckier, aide to Mayor Jay Gillian, explained Monday that there are several steps that must be completed to receive FEMA’s approval for the flood insurance discount. The city already passed the resolution to begin the process. A series of documents were sent to FEMA, which were sent back to the city recently with revisions sought by federal officials. The city sent a revised packet back. Once the federal authorities send it back to the city, council can adopt it and then FEMA could give final approval. Mayor's Aide Vince Beckier and consultant Craig Wenger go over plans for improvements in drainage to Third Street at a meeting in January. “Our hope is by October we will have a full review by the City Council and then we can move up two categories,” Beckier said. While Ocean City is now attempting to get a higher community rating, known as Class 3, Beckier noted that the town has been in the federal program since the 1990s and is always looking at ways to make improvements, which include cost savings to property owners. “We are always reviewing the program, and this is just part of that natural process,” Beckier added. First Ward Councilman Michael DeVlieger said of the potential change in community rating, “The work that is being done will not only impact our insurance rates, it will positively affect the quality of life for our homeowners for decades to come.” Of about 19,500 properties that are in flood zones, there are about 17,000 flood insurance policies, said Arthur Chew, supervising engineer for Ocean City who is also the Community Rating System coordinator for the program. Homeowners aren’t required to have flood insurance unless they have a mortgage on the property. And while some people opt not to carry it because of the cost, others, under the new flood maps, are not required to but should have it, Chew cautioned. On average, a property owner with a $661 annual flood insurance policy receives a $61 discount with the city’s current Class 5 rating with FEMA. The proposed change to a Class 3 level would reduce the cost by another $60 for an average property owner. Chew based the figures on a range that property owners pay from $400 a year in flood insurance for new construction to thousands for some older homes. The severity of the flood area also is considered. “If your house is right at flood elevation, you will pay $1,500 to $2,000 a year. But if your house is lifted above the base flood elevation, you will pay $800,” Chew explained. “If your home is for some reason built incorrectly, you could be paying in the $10,000 range.” Chew said that as of November 2016 the cost for all federal insurance policies in Ocean City was nearly $11.3 million. The Class 5 rating enabled property owners to save about $2.8 million. Beckier said the city hopes it is on its way to the new classification. After all the documentation is in, FEMA officials will tour Ocean City and determine if it should receive the modified community rating. If everything is approved, property owners could see the additional 10 percent discount in their flood insurance premiums by May 2019. In December, Sea Isle City Mayor Leonard Desiderio announced that his town was awarded the Class 3 level for flood insurance discounts, giving property owners there 35 percent discount. Sea Isle became the first municipality in the state to receive the Class 3 designation. Flooding near Sixth Street make it impossible for cars to pass after a nor'easter in March.