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Date of Issue: April 09, 2008

Some Island structures lose insurance discount

Thanks to a bureaucratic change, some Island property owners may face an increase in their flood insurance premiums.

The Federal Emergency Management Agency, which operates the community rating system for the National Flood Insurance Program, has decided that all flood insurance policies for buildings that are rated as “having the lowest floor one foot or more below the base flood elevation will no longer be eligible for the community’s CRS discount.”

In a letter to Island cities, the NFIP said that owners of buildings that are “at high risk” and “may not be compliant” with the NFIP’s construction criteria, are still reaping the benefits of a city CRS program to lower flood insurance premiums. That’s got to change, the NFIP said.

Effective May 1, FEMA’s new policy is that if a structure is one foot or more below the base flood elevation, it will no longer be eligible for the CRS discount.

But FEMA did make some exceptions.

The new policy only affects elevation-rated buildings and only buildings in a mapped “Special Flood Hazard Area” are affected.

The policy also doesn’t apply to V-zone properties that have approved breakaway walls surrounding unfinished enclosures “used only for building access, storage and parking, but that were rated based on the enclosed area being the lowest floor.”

Further, said FEMA, the policy does not affect buildings that were “compliant when they were built, but whose flood zone has been changed,” or whose base flood elevation has been “raised to a level above the lowest floor through the issuance of a new map.” These structures can be “grandfathered in,” FEMA said.

Sound confusing?

Not to worry, said Anna Maria Mayor Fran Barford.

“We’ve only got two buildings that the new rule applies to, but we’re still checking all the exceptions,” she said.

Property owners won’t know if they’ve made the hit list until they get their annual renewal, which will state on the declaration page a “zero” for the CRS discount.