Flood insurance policyholders to see 5% cost reduction

Some holders of flood insurance policies in Terrebonne Parish will see the cost of their policies reduced 5 percent further beginning Oct. 1, said parish flood plain manager and senior planner Mitch McDonald.

Residents of Terrebonne and Morgan City living in areas vulnerable to flooding already have a 10 percent reduction in the cost of flood insurance because the parish and the city participate in the National Flood Insurance Program’s Community Rating System.

FEMA’s National Flood Insurance Program provides federally subsidized coverage in return for communities maintaining flood control standards. The Community Rating System offers reductions in the cost of policies to communities that voluntarily undergo stricter flood control measures. According to a FEMA release, 79 percent of flood insurance policies in Louisiana are written in areas participating in the system.

Houma and Terrebonne Parish participate separately in the system, but the two will be merged when new FEMA flood maps are adopted, McDonald said.

“We will be a community with one community map,” McDonald said. “Right now we have to do two sets of paperwork.”

The new maps, used to establish flood insurance rates, were issued by FEMA earlier this year and are being appealed by Terrebonne. Officials believe some measurements are incorrect, mandating higher-than-necessary elevations in parts of the parish.

Houma and Terrebonne entered the National Flood Insurance Program in 1970. Both have participated in the Community Rating System since the program began in 1990.

Some of the measures taken by communities to participate in the system, McDonald said, include sending letters to owners of repetitive loss properties; promoting awareness of hazard mitigation and having hazard mitigation plans approved by the state; and offering outreach programs.

Other measures include providing information in public waiting areas and libraries; sending letters to real estate agents, insurance agents and surveyors about the flood insurance maps; having drainage and emergency plans reviewed; and acquiring flood-damaged property.

Communities are rated on a scale of one to 10, enjoying a 5 percent discount on flood insurance policies for each spot below 10.

Houma and Terrebonne are currently rated at 8 in the system, but that figure will drop to 7 on Oct. 1. Morgan City is also currently rated at 8.

At that level, yearly savings for the 14,334 flood insurance policyholders in Terrebonne total $797,742; for the 5,630 policyholders in Houma, $154,156; and for those in Morgan City, $102,367.

Thirty-six other cities, towns and parishes statewide participate. Lafourche Parish and its incorporated areas do not belong to the system.

No community in the state rates below 7, though Jefferson Parish will drop to 6, said Terrebonne Parish President Michel Claudet at a recent town hall meeting.

According to McDonald, Jefferson has an exceptionally strong flood management system. Besides Jefferson Parish and Kenner, two other areas in the state have 7 ratings: Shreveport and East Baton Rouge Parish.

McDonald said 12,292 policyholders in parts of Terrebonne and Houma located in areas less vulnerable to flooding hold Preferred Risk Policies and do not receive any discount. However, their premiums are lower already.

“These are the cheapest policies,” he said. “They do not require elevation or flood insurance to get loans. But if you happen to be in those zones, you want to get a good policy.”

McDonald said FEMA bases Community Rating System scores on assessments made by the New Jersey-based Insurance Services Organization, which provides data and information about property risk to insurers and governments.

“We’ve got a recommendation from Insurance Services Organization to go from an eight to a seven,” he said.

FEMA will issue a final determination letter this month or in September.

McDonald also said a 6 rating for Terrebonne could be attainable. Reaching that level would trigger a 20 percent discount for flood insurance policyholders.

“We are close enough to a 6,” McDonald said. “We need to tweak a few things, have more outreach.”