Some Bay County residents to see big drop in flood insurance following FEMA changes

Samantha Neely, The News Herald
·4 min read
An empty car sits deep in flood waters on Sheffield Dr., near 3rd St., in Springfield on Oct. 7, 2021. City officials would like more state aid to help fix stormwater drainage issues.

BAY COUNTY — The last day of hurricane season ended on a potential high note for some residents.

Congress passed a new rating methodology for flood policyholders that went into effect on Oct. 1. This new methodology considers “rebuilding costs and equitably distribute premiums across all policyholders based on home values and a property’s unique flood risk,” according to the item request form.

The bottom line for Bay County residents is a big reduction in costs, according to Panama City Disaster Recovery Manager Jennifer Aldridge, who presented the changes to Panama City commissioners on Tuesday morning.

Aldridge said these changes will mean that 22% of Bay County policyholders will see a decrease of more than $100 per month, 70% will see increases of $10 per month, 5% will see increases between $10 and $20 per month and 3% will see increases from $20 to $100 per month.

“These are gonna show some of these houses that are not up to code,” Aldridge said. “They are in that 3% policy if they have flood insurance.”

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Aldridge highlighted that the program known as “Flood Risk System 2.0” is no longer dictated on what zone you are in, instead focusing on variables such as the property's distance to flood source, what type of flood, its ground elevation to nearest flooding source, first flood height and its construction and foundation type. It also will consider rebuilding costs.

“It wouldn’t be the market value, it would be the cost to rebuild,” Aldridge said.

For those who were policyholders before the new guidelines, FEMA is setting up a “glidepath formula” so they don’t see an automatic spike in their insurance rates.

“The glidepath will be based off of what the category restructure is,” Aldridge said.

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City Manager Mark McQueen made note of how long flooding has been affecting residents, especially post-Hurricane Michael.

“As you know, one of the challenges that our community has faced after Hurricane Michael is flooding,” McQueen said. “Flooding has taken place in our community more so in this year with historic rains, it's becoming more extenuated.”

Aldridge said the city is doing much to mitigate and reduce insurance rates for residents, including participating in the CRS program and working to get a better class rating. She said they also are applying for more Hazard Mitigation Assistance Grants.

“We are currently a class 6, and we are working toward improving,” Aldridge said. “I am actually working right now on updating the floodplain ordinance to implement higher standards, which will get us better points and a higher rate.”

McQueen said the changes will be helpful to a lot of people, such as residents who have built outside of flood zones, and will reward those who have been proactive against flooding.

“It’s incentivization for the community, the city to spur more aggressive techniques to be able to prevent flooding,” McQueen said. “There’s also opportunities for residents and property owners to be able to take action to protect their properties against flooding.”

Example methodology rate in Panama City area:

  • Structure 1 — Inside the Special Flood Hazard Area (A, AE, VE) that are built in compliance and were current flood policyholders prior to Oct. 1 will be given a 20% discount.

  • Structure 2 — Outside the Special Flood Hazard Area (X) that are built in compliance and were current flood policyholders prior to Oct. 1 will be given a 20% discount.

  • Structure 4 — Inside the Special Flood Hazard Area (A, AE, VE) that are new businesses or residents and not in compliance will be given no discount.

  • Structure 5 — Outside the Special Flood Hazard Area (X) that are new businesses or residents will be given a 20% discount, considered straight to Full-Risk.

As for what will not be changing under the new risk rating, residents can expect the following to stay the same:

  • Mandatory purchase of flood insurance for those located in a Special Flood Hazard Area (VE, V, AE, A, AH and O)

  • Policyholders still will be able to transfer their discounts to a new owner by assigning their flood insurance policy when their property changes ownership.

  • Discounts still will be made available for those communities that participate in the Community Rating System (CRS) Program.

As for what is changing:

  • It no longer will be required to have an Elevation Certificate, however Aldridge said you can still use that certificate to get a better rating from your provider.

  • They will be expanding the mitigation discounts, such as having so many feet above the base elevation and machinery elevated.

  • It no longer will differentiate based on inside/outside of SFHA.

  • FEMA will be leveraging more information on flood hazards.

  • FEMA will be factoring in building replacement cost value to calculate premium, which will consider geographic and building variables when determining the premium.

Residents who have further questions on how this will affect them are advised to contact Aldridge via email at jaldridge@pcgov.org or visit the city’s website.

This article originally appeared on The News Herald: Bay County to see drop in flood insurance for many residents