City exploring path to greater flood insurance discounts
The city of Cape Coral will explore ways to obtain greater discounts for those who pay for flood insurance,
Cape Coral City Council agreed Wednesday look further into measures the city could take to obtain a Class 4 Community Rating System rating, which would provide a 30% savings on the National Flood Insurance Program.
The city currently qualifies for a 25% discount.
City Manager Mike Ilczyszyn said the presentation to Council was the second in a three-part series regarding special flood hazard areas, and floodplain regulations. The third and final presentation will use the information from the first two to make decisions and give administration some guidance on where Council would like to go regarding the city’s floodplain management code.
Building Official Shane Kittendorf began the presentation by explaining the National Flood Insurance Program and how flood insurance premiums are rated. Key changes for the flood insurance premiums include proximity to water, cost to rebuild, flooding types, and frequency and mitigation measures.
“FEMA has had in place, for more than 50 years, a rating system that is generic in nature. Since that they saw that individuals were paying more in certain areas versus others that were not likely to be inundated by a flood,” Kittendorf said.
NFIP benefits those communities that actively participate to gain access to a wide range of benefits that support public safety, property protection, and long-term resilience, Kittendorf said. Participation ensures access to federally-backed mortgages and loan guarantees and reliable real estate transactions.
The minimum requirements to remain in good standing include adopting and enforcing floodplain management regulations, reviewing, and issuing floodplain development permits, maintaining accurate floodplain maps and records, conducting community outreach and education, and participating in regular audits and compliance checks.
The presentation went into further detail regarding substantial improvement and substantial damage – the 50% rule, which “serves to reduce future flood risk by gradually bringing older, non-compliant structures up to modern flood-resistant standards.”
Substantial improvement is if the “cost of the improvement equals or exceeds 50% of the structure’s market value, the entire building must be brought into compliance with current floodplain development standards.”
Substantial damage “applies when a structure has been damaged by any origin – such as flooding, fire, wind, or other disasters. If the cost to restore the structure to its pre-damage condition is 50% or more of its market value, it is considered substantially damaged.”
Floodplain Manager Sofia Saiz the Community Rating System is a voluntary program that encourages communities to implement high regulatory standards – effective floodplain management practices. She said communities earn points for various flood mitigation activities.
The key categories include public information, mapping and regulations, flood damage reduction, and warning and response.
“The most points earn the higher classification or class – discount for flood insurance premiums,” Saiz said. “The ratings go from Class 10, the lowest rating, to Class 1, earning the highest discount.”
The discounts are up to 40% of premium discounts, and 10% for those outside a special flood hazard area.
Saiz said the city is audited on an annual basis, and there is a three-to-five-year formal verification where they are visited on site.
“We are on a three-year cycle due to our rating,” she said.
The city of Cape Coral currently sits at a Class 5 with 2,755 CRS points, earning a 25% discount. This class ranges from 2,500 to 2,999 points. The city has maintained this rating since 2010.
Saiz said for residents to get the full 25% discount, their structure must be in compliance. She said homeowners are eligible up to a 25% discount.
“Depending on the status of the structure, they won’t see the full 25%,” she said.
Property owners can search their flood information on the city’s website under “I Want To,” then “FEMA Flood Elevation Certificate.” From there an individual can plug in their address.
The next discussion will look at what the city can do to seek the Class 4 rating.
“There are so many things that can be done,” Saiz said to reach the Class 4 level, which would provide a 30% discount. “We are going to present the pros and cons and decide on what we want to proceed with.”