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Levee Repairs Could Offset Flood Insurance Costs

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Terry Jones, economic development planner/grant administrator for West Central Indiana Economic Development District, said town residents currently pay a levee association tax, which varies yearly based on projects. The association does not bank money for future projects.

Last year, on average, residents paid $12 for the year on a parcel with a $50,000 property assessment, Jones said.

“That annual amount could be more than triple,” to help pay for needed levee repairs, he said. “But that is better than the alternative, which is having to buy expensive flood insurance.”

Flood insurance costs vary by risk zones, said Daniel Pigg, an agent with Howard Clare Insurance Agency. If West Terre Haute’s levee is not accredited, “the banks will then say, ‘well, to meet our loan guidelines with Fannie Mae and Freddie Mac, (homeowners with federal loans) will have to acquire flood insurance.’ That is a double whammy, as (homeowners) not only have to purchase flood insurance when it was not required before, but they will be in a high-risk flood area,” Pigg said.

West Terre Haute property owners “will get hit with $1,000 to $1,500 flood premiums per year, depending on the deductible,” Pigg said. “The problem is, in that community, they can’t afford it.
They will not be able to do it financially.”

Conversely, with the levee accreditation and a $1,000 deductible, flood insurance can be bought for $304 annually, for $100,000 of building coverage and $40,000 of contents, Pigg said.

Vigo County previously used an intergovernmental loan to help the town of Riley with a water project. Under state law, however, the loan must be paid in full by the end of the year.

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Posted by FanningCommunications on May 1st, 2014 and filed under News. You can follow any responses to this entry through the RSS 2.0. You can leave a response by filling following comment form or trackback to this entry from your site

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