May 1 Change Means Cheaper Insurance Premiums for Homeowners

Effective May 1, 2009, the city of Kenner will be moved by the federal government to a higher classification in the National Flood Insurance Program’s (NFIP) Community Rating System. This will allow insurance companies to sell flood insurance to property owners at a larger discount than now.

In announcing the new rating, Keith Chiro, director of Kenner’s Department of Inspection and Code Enforcement, which manages the city’s involvement in meeting NFIP standards, said the Federal Emergency Management Agency (FEMA), recently informed him of Kenner’s elevated status. The action follows a five-year cycle verification visit last year.

He said the NFIP provides federally backed flood insurance that encourages communities to enact and enforce floodplain regulations.  To be covered by a flood insurance policy, a property must be in a community that participates in the NFIP.  To qualify for the program, a community must adopt and enforce a Floodplain Management Ordinance that contains certain basic NFIP requirements. 

Today there are more than 19,000 communities participating in the NFIP.

Chiro said in 1990 the NFIP initiated the Community Rating System; and, under the CRS there is an incentive for communities to do more than just regulate construction to minimum national standards.  The goals of the CRS are to reduce flood losses, facilitate accurate insurance rating and to promote awareness of flood insurance.

Participating in the CRS allows a communities flood policyholders to be eligible to receive insurance premium rate reductions.  The discount rate is based on the community’s classification level.  There are currently approximately 1,200 communities that participate in the CRS.  There are 39 of these communities in Louisiana.

 Chiro said there are 10 CRS classes, with Class 1 being the highest.  All communities start out as a Class 10. After the first year in the program, communities are eligible to apply for a higher classification.  There are 19 creditable activities that a community can participate in.  Each activity awards points, which is what is used to determine a community’s classification.

 He added that Kenner has participated in the CRS since 1992.

 “We are currently at a Class 8 classification,” Chiro said. “There are presently 16,302 flood policies in effect in Kenner. Flood policyholders that own property in a special flood hazard area currently receive a 10 percent reduction in flood insurance premiums.  Properties that are located in non-special flood hazard areas receive a 5 percent reduction in flood policy premiums.  This equates overall citywide to a savings of $1,213,947.00 in flood insurance premiums paid by property owners.”

 Mayor Ed Muniz said that in recent years, Chiro and his staff have made a diligent effort to improve the city’s classification.  He praised their efforts which have proved successful in obtaining the new classification. Our participation in the CRS at times involves numerous code enforcement personnel who collectively work to ensure that we are complying with the requirements of each activity that we participate in.

 Chiro said Kenner will become only the fourth community in the State to achieve this status.  There are no communities in the State that have a classification higher than a 7.

 “This means that flood policyholders owning property in a special flood hazard area will now receive a 15 percent reduction in flood insurance premiums and those policyholders in a non-special flood hazard area will continue to receive a 5 percent reduction in flood insurance premiums,” he added.  “This will now equate to an overall premium savings of $1,800,000.00 citywide.

 “Our Class 7 status will be effective May 1.  All flood policies purchased or renewed after May 1 in which the properties are located in a special flood hazard area will receive the higher discount rate.”

 Chiro praised several people on his department’s staff who worked on the verification visit:

 Chiro cautioned flood insurance buyers after May 1 to make sure they are receiving the higher discount.  The discount rate is stated on all flood policies.

·         Ms. Linda Ryan the Insurance Services Office Specialist that conducted our 5-year cycle verification visit.  The 5-year cycle verification visit is basically a very in-depth audit of a community’s program.  At that visit the ISO Specialist verifies that activities are being implemented and requests an enormous amount of appropriate documentation; and in Ms. Ryan’s case, she made suggestions and encouraged me to implement additional activities so that we could attain the required amount of points needed to move to a higher class. 

·         Ms. Ann Theriot with Meyers Engineers who has assisted us for many years.  Ms. Theriot helps assemble documentation when required and also coordinates the Outreach Projects we are required to do. 

·         Finally, several staff members including Dana Fink, Lorraine Travasos, Patricia Borland, Maurice Price and Andrew Porrazzo, all of whom have important roles in the ongoing implementation of this program. 

·         Kelly & Nancy Ladner with KTV who produced a Town Talk Show which featured Kenner’s participation in the CRS.  We were awarded additional points as a result of televising the show and will continue to do this on an annual basis.