Flood insurance rates on the rise in Seaford area?

Households in Wantagh and Seaford could see increased flood insurance premiums on policies that renew after April 1, due to the National Flood Insurance Program’s new system for setting prices.

The new rating methodology, called Risk Rating 2.0: Equity in Action, ensures “flood insurance rates are actuarily sound, equitable, easier to understand and better reflect an individual property’s flood risk,” according to a release from the Federal Emergency Management Agency. For new policies, this rating system has already been used since last Oct. 1.

Risk Rating 2.0 compares rate changes with the legacy rating system that has been in place since the 1970s. “The comparison data debunks a huge myth held by many critics of the new methodology that under the old system, flood insurance rates were not subject to regular annual increases,” David Maurstad, senior executive of the National Flood Insurance Program, said in a FEMA news release. “The truth is rates have gone up every year for all policyholders and will continue to do so if no action is taken.

“The side-by-side comparisons show some policyholders now will experience decreases under year one of Risk Rating 2.0,” Maurstad added of the change, “while a majority of remaining policyholders will see premium increases mostly on par with what they already pay.”

FEMA said that the new methodology takes into account the cost of rebuilding, which ensures “equitable” rates for all policyholders.

According to Redfin, a real estate brokerage that details market trends, approximately 1,401 homes in Wantagh and 2,254 homes in Seaford are at risk of flooding. Eleven percent of those homes in Wantagh, and 33 percent in Seaford, are required by their mortgage companies to have flood insurance policies. Premiums can cost anywhere from $225 to just under $2,500 per month.

High Risk areas for flooding, as defined by FEMA, are areas with a 1 percent annual chance of flooding and a 26 percent chance over the course of a 30-year mortgage. In Wantagh and Seaford, the base floodplain, where flood elevations are provided, is also considered when determining risk.

On FEMA’s website, a flood insurance rate map can help determine risk by location. At Mike Walsh’s State Farm Insurance office in Bellmore, Chris Bauer, the agency’s flood specialist, showed the Herald how FEMA’s mapping system works. Entering an address into the mapping service,

FEMA takes into account factors including distance from the shoreline and elevation to determine the risk. Maps are drawn based on where there were losses and damage due to floods.

Insurance companies cannot write National Flood Insurance policies — they must be written through FEMA. An agency’s licensing can, however, allow employees to write policies for FEMA, using the mapping system as a tool to determine risk.

Along Wantagh and Seaford’s coastline, where there are inlets and canals, many new residents who buy homes may not realize they are at risk of flooding.

FEMA flood insurance policies require the first year’s premium be paid in full. After that, Bauer explained, customers can opt to have flood and home insurance monthly premiums built into a mortgage payment.

According to FEMA, there are some things that will not change with Risk Rating 2.0, such as limiting annual premium increases — most rates cannot increase more than 18 percent year to year. Additionally, flood insurance rate maps will still be used.

Risk Rating 2.0 State Profiles can be found on FEMA’s website, fema.gov, along with additional information on the new system. Downloadable Excel spreadsheets break states down by ZIP codes, so homeowners can see what to expect. Some policies in Wantagh and Seaford will see significant premium decreases.

According to FEMA, current and potential National Flood Insurance policyholders should contact their insurance company or agency to learn about their specific rates, and whether the changes will affect their policies.