Majority of Michigan residents see lower flood insurance rates as federal government adjusts prices – The Oakland Press
My walls were crying.
That’s what Latausha Robinson said. It was late June and the Detroit resident had just welcomed her son home after her campus was closed by COVID-19. Her son and all of his belongings were now in the basement of the family home.
Soon after, 6 to 8 inches of water began to seep into the basement. It was the first time Robinson could remember having had a flood problem, which had four drains in his basement.
Robinson, who is considering purchasing flood insurance, stopped by the FEMA disaster recovery center in Southfield on Thursday to see if she could receive additional federal help.
Statewide, 20,481 Michigan residents have a combined $ 4 billion in flood insurance coverage through FEMA’s National Flood Insurance Program (NFIP).
The 53-year-old program provides 90% of flood insurance policies in the United States and is insured by a network of 60 insurance companies. It is undergoing major changes that will cause some policyholders to see rate increases and others to see decreases based on a wider range of data sources.
Soon after, she noticed mold growing on her walls and along the baseboards from all the moisture. She had it cleaned immediately, especially since one of her daughters suffers from asthma.
“I have a lot of structural damage,” she said. “I was originally approved for $ 500 in federal aid and appealed because I have a lot more damage than that. A lot of things in my basement were destroyed. The water was seeping in. I did some repairs, but a lot more is needed.
Robinson joins thousands of other residents of Macomb, Oakland and Wayne counties in search of first aid in the event of flooding as part of the presidential declaration of disaster following the June 25-26 floods caused by heavy rains that moved across southeastern Michigan.
Flood insurance, offered through the NFIP, covers direct physical losses caused by flooding which can cover buildings, building contents, or both, and is generally required for mortgages on considered properties. as having about a 1 in 100 chance each year of flooding, but is optional for everyone. The NFIP offers flood insurance to homeowners, tenants, and business owners if their community participates in NFIP, with communities agreeing to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding. ‘flood.
FEMA officials said the changes are needed to correct entrenched inequalities in the program, which covers about 5 million policyholders nationwide. Flood insurance rates will now be calculated using the agency’s Risk Rating 2.0 methodology, which is a longer list of factors that better reflect an individual homeowner’s flood risk.
Statewide, 9,361 current NFIP policyholders are expected to see their monthly flood insurance rates increase, while the remaining 11,120 policyholders are expected to see their flood insurance rates decrease due to the methodology. According to FEMA data, the average amount of combined flood insurance coverage by the Michigan community is approximately $ 4 million.
According to FEMA, 68% of Michigan’s 1,773 communities are enrolled in the NFIP program, including 52 in Oakland County, which has 1,349 active policyholders with combined flood insurance coverage of $ 350 million. Federal data shows that the city of Troy has the largest coverage with $ 44.4 million spread across 143 policyholders.
Of those 1,349 active policyholders in Oakland County, 842 are expected to see their monthly rates drop, while 507 are expected to see their monthly rates increase under the new rate structure, most between $ 1 and $ 10 per month. About 15 policyholders will see increases of more than $ 10 per month.
The increases will not take effect until after April 1, the agency said. But new flood insurance policies purchased through the NFIP will pay the new rates immediately. Existing policyholders whose policies are renewed before April 1 and whose premiums decrease will be able to take advantage of the lower rates sooner.
Since the 1970s, flood insurance rates have primarily been determined by a property’s proximity to a federally approved floodplain and its elevation based on 100-year flood risk. Under the old pricing system, each insured would have seen their rates increase now and in the future.
The new rates will be based on the home’s value and the cost of reconstruction as well as a property’s true risk of flooding, including the threat of extreme rainfall events, climate change, distance from a body of water, flood type, ground elevation, and other property specific data. such as the type of foundation / construction and the height of the first floor.
This will allow FEMA to provide more accurate pricing based on the individual characteristics of a property and remove the requirement for a flood elevation certificate, which can cost up to $ 2,000, while still making lower value properties cheaper to insure and avoiding the premiums paid on these properties. subsidize more expensive properties in riskier areas.
Matthew Occhipinti, Michigan’s NFIP coordinator and floodplain engineer for the Michigan Department of the Environment, Great Lakes, and Energy (EGLE), said the new pricing system would not affect the number of owners, tenants or business owners eligible for flood insurance.
“I think FEMA has known for a long time that it needs to update the way it calculates tariffs,” he said. “For the relatively small number of people who will see their flood insurance premiums increase, they are not going to jump like they would with the traditional pricing system. This new methodology takes a more granular approach, so your rate will depend on many different factors, so site-specific details will matter.
While this is a major change in the way FEMA calculates flood insurance rates, Occhipinti added that it does not affect NFIP regulations, the way flood plains are drawn, requirements for construction in a floodplain, requirements for certificates of elevation and annual rate increases capped by law. at 18%.
Under the old pricing system, he said everyone’s flood insurance rates would go up or down.
“The new system takes into account other variables such as how far you are from the water,” he said. “In other words, under the old system, you could have someone who was right next to the river and who would pay the same premiums as someone who was right on the edge of the floodplain. he was at the same altitude. In the new system, someone who is right on the edge of the floodplain will pay less than someone who is right next to the water.
Gary Nigro, chief engineer with the Oakland County Water Resources office, said major flooding has increased across the county as more intense rainfall has occurred, but that doesn’t mean the systems Stormwater doesn’t work as it should, a common misconception. he added.
“There always seems to be this question of ‘what broke and what are you doing to fix it? “”, did he declare. “I try to explain to residents that the system is only designed for certain heavy rains. If you have a five gallon bucket and you try to put seven gallons of water in that bucket, would you say the bucket is broken? It held the first five gallons as expected. Much the same thing happens in our storm water systems.
Nigro said the county’s stormwater drains are designed to drain water from larger areas of the region, but these more frequent, stronger, and more concentrated rain events in neighborhoods can cause problems in communities. Local storm drains that can’t handle that weren’t designed to handle this. a lot of water in such a short time resulting in flooding of basements and properties.
Building coverage includes the insured building and its foundation; electrical and plumbing system, central air conditioning equipment, furnaces, water heaters, refrigerators, stoves, built-in appliances such as dishwashers and carpets permanently installed on unfinished floors.
Content coverage includes clothing, furniture and electronic equipment, curtains, portable and window air conditioners, portable microwaves and dishwashers, rugs not already included in property coverage and washers and dryers.
To learn more about NFIP and to see if your community has participated, visit https://www.floodsmart.gov/ or https://www.fema.gov/flood-insurance/risk-rating/profiles.