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Ocean City

City receives favorable re-mapping for flood insurance program

(Aug. 16, 2013) In what was called a “major coup” for the resort, new flood maps have, preliminarily, pushed the highest risk zones in the resort east of the dune line, potentially saving oceanfront property owners significant amounts of money in the National Flood Insurance Program.

“We put the dunes in 25 years ago this year, and they worked,” said city Planning and Community Development Director Matt Margotta. “We’ve taken whole, large areas out of our flood zone. This very much encourages redevelopment, given the decrease in insurance costs that we’ll likely see.”

Most of the resort, under the Federal Emergency Management Agency’s preliminary maps, will now be an ‘A’ zone. Such zones require property owners to carry flood insurance, but are less costly than ‘V’ zones, which denote high-velocity impact risk.

“The ‘V’ zone is a velocity zone usually associated with beaches,” Margotta said. “That zone now ends almost right along our dune line.”

However, the maps are not set in stone and could be revised over the next two years while FEMA works to finalize them.

“Until the government gets done, we’re not sure what it’s going to be exactly,” said Reese Cropper of Insurance Management Group. “But we weren’t sure the dunes would be credited [as blocking the ‘V’ zone] and that is a major coup. Rates are going up, and a lot of people will see less of an increase now.”

Since the inception of the NFIP in 1968, the Federal Emergency Management Agency has been authorized to provide flood insurance to those communities that commit to studying and mitigating their flood risk. This is done through the creation of Flood Insurance Rate Maps (FIRMs), which indicate what areas have greater danger of high water and should thus pay larger premiums for their insurance.

The FIRMs also allow FEMA to designate Special Flood Hazard Areas (SFHAs), in which flood insurance purchase is mandatory, and where a Community Rating System (CRS) is used to determine how well a community has undertaken measures to reduce flood damage.

Ocean City adopted the program and FEMA’s guidelines relatively early. The city was first flood mapped on June 6, 1971, and on July 2, 1973, it adopted its Flood Plain Ordinance in order to conform to FEMA’s mitigation standards for the SFHA that encompasses most of the island.

Activities include elevating homes and exposed utilities, as well as the extensive beach replenishment efforts, in which the city shares the cost of sand dune replacement with the county and state. This has allowed Ocean City to receive the highest CRS rating, and a subsequent 15 percent discount on all flood insurance in the resort.

“We’re currently ranked 29 out of the 22,000 communities that FEMA rates for flood protection,” Margotta said. “This modes very well for us in the insurance program.”

The NFIP was re-authorized by the federal legislature last year for a period of five years, despite the program’s increasing financial vulnerability. But in order to get the system back on sound footing, the re-authorization mandated rate increases that will, in theory, help to make the program more self-sustaining.

Most of those increases would hit the higher-risk areas, particularly ‘V’ zones, with increases of up to 15 percent, Cropper said. However, he and other business leaders have lobbied that the city’s man-made dunes should be counted as a suitable obstacle that would prevent impact and downgrade the oceanfront ‘V’ zone to an ‘A’ zone.

The last FIRMs were compiled in the early 1980s, before the city had begun beach replenishment and at a time when many properties were built beyond the natural dune line.

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