Hilton Head Island flood plan to cut premiums by 25 percent

Hilton Head Island property owners will save on flood insurance premiums, thanks to efforts by town officials to safeguard against flooding.

Town manager Steve Riley announced Thursday the island received a Class 5 rating from the Federal Emergency Management Agency’s National Flood Insurance Program. The town previously was rated Class 6. The lowest rating is 10; the highest is 1.

All NFIP policies issued or renewed after May 1 for properties in flood-hazard zones will get a 25 percent discount on premiums under the new rating. Last year, the discount was 20 percent. Properties not in flood-hazard zones are eligible for “preferred-risk” policies, which offer lower-cost protection for homes and apartments in areas of low to moderate flood risk. These are areas outside of known flood plains.

Most homes on the island will be eligible for the discount, said Trudie Johnson, town flood plain administrator.

More than 30,000 flood insurance policies cover about $7 billion worth of residential and commercial property on Hilton Head, according to a town press release. The annual premiums on those policies are about $15.8 million. The island has about 29,000 homes, according to a 2008 estimate from the U.S. Census Bureau, the most recent year figures were available.

Most flood insurance comes from the National Flood Insurance Program, which is overseen and underwritten by the Federal Emergency Management Agency. Standard homeowners insurance does not cover flooding. Congress created the flood insurance program in 1968 to help people buy insurance that was not widely available and often expensive on the private market.

The program covers up to $250,000 for building and property and up to $100,000 in personal property for residential coverage, according to the FEMA website. Polices pay up to $500,000 for business structures or other non-residential buildings and up to an additional $500,000 for equipment or inventory.

With the improved rating, policy holders on Hilton Head living in an “A” flood hazard zone with a maximum $250,000 property coverage will save an average of $144. Total savings as a result of the town’s participation in the program is estimated at more than $4.4 million, Riley said.

Hilton Head becomes one of 52 communities nationally that have received a Class 5 rating, according to FEMA.

“This is a pretty big deal,” Riley said. “This is a way not only for the town to help residents save some money, it’s a way of preparing for flooding so that we can get things cleaned up and get the economy going by getting people back into their homes and businesses faster.”

Johnson said the island has been working to improve its rating for the past three years. She credits the new rating to improved stormwater drainage, beach renourishment, strict building codes that reduce the likelihood of flood damage and preserving open space.

She said she’s hopeful the town can lower its rating even more.

Local flood insurance agent Ray Craver of Seacoast Insurance complimented Johnson and the town for their efforts.

“It’s great news. In this economy, every little bit helps,” Craver said of the savings residents will see in their flood insurance. “We don’t get 25 percent credit unless we’re actively looking for ways to reduce flood losses and the economic disruption that we would have on Hilton Head. Those types of things the town is doing will have a huge effect perchance we have a major flood.”