Homeowners’ Flood Insurance Discount Could Decrease

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Several thousand Raleigh residents who live in areas prone to flooding could be paying more for flood insurance if the City Council does not approve changing the building permit process. But making that change could mean higher building costs for all Raleigh residents.

The Community Rating System, which is part of the National Flood Insurance Program, determines the discount floodplain residents receive on insurance premiums. The voluntary program has a rating system of 0 to 10; communities rated a 10 receive no discount.

The city is now rated at 7, which allows for a 15 percent discount on insurance premiums. The city could be as low as a 6, which would equal a 20 percent discount.

But the program is changing. To keep the rating, the city would have to require structural plans when a homeowner applies for a permit to build an addition – like a deck — on his or her home. The plans would not have to be sealed by a design professional, but they would have to be prepared and reviewed by the city.

The new requirement would apply to all applicants, not just those living in a floodplain. Today, the city does not require structural plans when applying for a building addition permit, and inspectors conduct a structural review on site.

During the past year, the city issued 354 addition permits. Of those, 13 percent were issued to homes in a floodplain.

According to the city, there are 1,900 flood insurance policies listed in Raleigh.

If the city does not approve the requirement, it would be downgraded to an 8 and the 1,900 policy owners could pay up to $50,000 more annually. If the city approves the requirement, the rating could be as high as a 6.

Councilors discussed the permit issue Wednesday at the Comprehensive Planning Committee meeting. Members debated the merits of adding another layer of procedure for any resident who applies for a permit when only 1,900 residents live in a flood-prone area.

Stormwater Development Supervisor Ben Brown said the city has the manpower to handle the process, but said it would extend the permit application review time.

Councilor Nancy McFarlane said it doesn’t seem fair to penalize every person who applies for a permit in exchange for lower insurance rates for a small section of residents.

“I just don’t see the benefit,” she said.

The committee voted to keep the permit procedure as is.

The council will vote on the matter at its next meeting Nov. 1.

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