NARRAGANSETT — The Federal Emergency Management Agency is in the process of updating Narragansett’s flood maps, as well as maps across the state as part of their national Flood Map Modernization Program and the new boundaries could cause some residents to see changes in their insurance needs when they go into effect on Oct. 19.
“FEMA recognized that in many areas of the country, the maps were more than 10 years old,” said Jason Parker, environmental planning specialist with the town.
“The most important thing is some people are going to be [affected] that weren’t before,” Parker said.
An exhaustive analysis of the new map hasn’t been done, though Parker estimates that the new boundaries will affect approximately 140 to 150 dwellings within Narragansett.
Residents who possess a federally backed mortgage are required to obtain flood insurance. If the dwelling is owned outright, then residents can purchase it on their own accord. Several weeks ago, Parker sent letters to those residents who may be affected by the change, explaining the situation and providing additional information.
Those who are now in the flood zone should look at purchasing insurance soon, said Parker. “If you purchase a policy before the maps go into effect, they will be grandfathered-in to a low-risk rate,” he said.
He added that those who choose not to purchase insurance before Oct. 19 could see a marked increase in insurance prices and premiums. To maintain the lower-rate premiums, flood insurance policies cannot lapse. Those who purchase insurance must maintain on-time payments or risk conversion to a high-risk premium. Also, if a resident wishes to sell their property in the future, the grandfathered-in flood insurance policy is transferable and the low-risk rate can be passed on to new homeowners provided there is no gap in coverage.
Saturday, August 14, 2010
UK house insurance premiums to rise dramatically as climate change increases flood risk
Climate change will increase the risk of flooding in the UK, which could lead to dramatic rises in insurance premiums for homeowners and businesses and make some areas of the country uninsurable, the Association of British Insurers has warned.
"Flood risk is the main catastrophic risk in the UK and we know that climate change will bring increased flood risk to the UK," said Nick Starling, director of general insurance and health at the ABI.
He said the pattern and nature of floods in recent years suggested that global warming was starting to have an impact: the severe floods in the summer of 2007 and the Cumbrian floods last year were caused by heavy downpours that did not dissipate.
"What our members are concerned about is the increase in areas of flood risk so that some areas may become impossible to insure," he added. He pointed to some "frankly daft planning decisions" where new homes were being built on flood plains.
The insurance industry has already warned that it may not insure new developments in flood plains if the properties were granted planning approval against Environment Agency advice.
The agency estimates that one in six homes in England and Wales are at risk of flooding. A spokesman said: "The latest UK climate change data shows this will increase in future due to rising sea levels and more frequent and heavy storms. Since the 2007 floods, the Environment Agency has completed 158 schemes and increased protection to 128,000 properties."
The ABI's forecast modelling shows that if temperatures rise by 2C, average annual insurance losses would go up by £47m and the risk of a once-in-a-century event would increase by £769m, which could push up the price of insurance by 16%. A temperature rise of 4C is estimated to increase annual losses by £80m and premiums could go up by 27%, while an increase of 6C would lead to additional annual insurance losses of £138m, pushing up prices by 47%.
Starling argues that while public spending is being squeezed, cutting back on investment in flood defences would be a false economy. "Damage done to schools and hospitals, not to mention homes and businesses, can cost billions to repair. For every £1 spent on protecting communities from the devastating impact of floods, £8 is saved to the economy," he will tell the Local Government Flood Forum on Thursday.
The 2007 floods, which hit Northern Ireland, Yorkshire, the Midlands, Gloucestershire, Worcestershire, Oxfordshire, Berkshire and South Wales, cost the insurance industry £3bn while the Cumbrian floods last November led to property and motor insurance claims worth £200m.
"We all want flood insurance to continue to be widely available and competitively priced beyond 2013," says Starling. "But for this to happen we need the government to keep to its pledge, under our agreement, to deliver a long-term flood management strategy backed by the right level of investment. This must include robust planning decisions, so that new homes are not built in areas at high risk of flooding."
"Flood risk is the main catastrophic risk in the UK and we know that climate change will bring increased flood risk to the UK," said Nick Starling, director of general insurance and health at the ABI.
He said the pattern and nature of floods in recent years suggested that global warming was starting to have an impact: the severe floods in the summer of 2007 and the Cumbrian floods last year were caused by heavy downpours that did not dissipate.
"What our members are concerned about is the increase in areas of flood risk so that some areas may become impossible to insure," he added. He pointed to some "frankly daft planning decisions" where new homes were being built on flood plains.
The insurance industry has already warned that it may not insure new developments in flood plains if the properties were granted planning approval against Environment Agency advice.
The agency estimates that one in six homes in England and Wales are at risk of flooding. A spokesman said: "The latest UK climate change data shows this will increase in future due to rising sea levels and more frequent and heavy storms. Since the 2007 floods, the Environment Agency has completed 158 schemes and increased protection to 128,000 properties."
The ABI's forecast modelling shows that if temperatures rise by 2C, average annual insurance losses would go up by £47m and the risk of a once-in-a-century event would increase by £769m, which could push up the price of insurance by 16%. A temperature rise of 4C is estimated to increase annual losses by £80m and premiums could go up by 27%, while an increase of 6C would lead to additional annual insurance losses of £138m, pushing up prices by 47%.
Starling argues that while public spending is being squeezed, cutting back on investment in flood defences would be a false economy. "Damage done to schools and hospitals, not to mention homes and businesses, can cost billions to repair. For every £1 spent on protecting communities from the devastating impact of floods, £8 is saved to the economy," he will tell the Local Government Flood Forum on Thursday.
The 2007 floods, which hit Northern Ireland, Yorkshire, the Midlands, Gloucestershire, Worcestershire, Oxfordshire, Berkshire and South Wales, cost the insurance industry £3bn while the Cumbrian floods last November led to property and motor insurance claims worth £200m.
"We all want flood insurance to continue to be widely available and competitively priced beyond 2013," says Starling. "But for this to happen we need the government to keep to its pledge, under our agreement, to deliver a long-term flood management strategy backed by the right level of investment. This must include robust planning decisions, so that new homes are not built in areas at high risk of flooding."
Flood insurance may be worth high cost
It’s probably a case of closing the barn door after the horse escapes, but this week’s flooding in Ames has moved the idea of flood insurance to the fore.
State Farm Insurance Agent Pat Brown said most of her clients don’t carry flood insurance unless federal law requires it.
She said insurance companies act as brokers, selling coverage to the federal government, which then provides it for property owners.
Insurance companies typically offer additional “endorsements” to customers to cover damage for sewer backups or sump pump failures, but anything more than that requires flood insurance, Brown said.
“If water seeps through basement walls or breaks the basement windows, that’s flood damage, and it’s hard for people to get their arms around that,” Brown said.
In spite of the fact that flood insurance isn’t that popular, Brown said her agency was busy Wednesday.
Tom Alger, spokesman for the Iowa Insurance Division, said most residential policies exclude flood damage. Broken or frozen pipes are covered, he said, but not flooding. Banks require property owners to buy flood insurance if their buildings are located in flood plains, Alger said.
The state agency encourages people to buy flood coverage every year, whether or not they live in a flood plain, he said.
“We remind people annually that one out of every four ‘flood events,’ as we call them, happens outside flood plains,” Alger said.
Alger and Brown said people can calculate what they might expect to pay by visiting the federal government website www.floodsmart.gov.
They said the site lets users type in their address to receive information about whether their property is in a high-risk area and what they might expect to pay for residential and commercial coverage on buildings and contents.
State Farm Insurance Agent Pat Brown said most of her clients don’t carry flood insurance unless federal law requires it.
She said insurance companies act as brokers, selling coverage to the federal government, which then provides it for property owners.
Insurance companies typically offer additional “endorsements” to customers to cover damage for sewer backups or sump pump failures, but anything more than that requires flood insurance, Brown said.
“If water seeps through basement walls or breaks the basement windows, that’s flood damage, and it’s hard for people to get their arms around that,” Brown said.
In spite of the fact that flood insurance isn’t that popular, Brown said her agency was busy Wednesday.
Tom Alger, spokesman for the Iowa Insurance Division, said most residential policies exclude flood damage. Broken or frozen pipes are covered, he said, but not flooding. Banks require property owners to buy flood insurance if their buildings are located in flood plains, Alger said.
The state agency encourages people to buy flood coverage every year, whether or not they live in a flood plain, he said.
“We remind people annually that one out of every four ‘flood events,’ as we call them, happens outside flood plains,” Alger said.
Alger and Brown said people can calculate what they might expect to pay by visiting the federal government website www.floodsmart.gov.
They said the site lets users type in their address to receive information about whether their property is in a high-risk area and what they might expect to pay for residential and commercial coverage on buildings and contents.
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