USA - Flood insurance rates will soar in some areas, FEMA says
Homeowners in the nation’s most flood-prone areas are facing huge price increases for flood insurance that could cause hundreds of thousands of people to cancel their policies and risk financial ruin if their home is flooded.
The Federal Emergency Management Agency, which runs the United States’ largest flood insurance program, recently published projections showing that its premiums are on track to jump by thousands of dollars a year in some areas.
The projections are the most detailed analysis FEMA has provided since it launched an ambitious restructuring of its National Flood Insurance Program several years ago.
In Plaquemines Parish on the Louisiana coast, the average flood insurance premium is projected to increase by 545 percent — to $5,431 from $842, FEMA data shows.
In Collier County, Fla., which was ground zero for Hurricane Ian, homeowners will pay an average of nearly $4,000 for flood insurance from FEMA. The average premium in the county on Florida’s southwestern coast is currently $1,053.
Average premiums will more than double in 800 of 3,000 counties, according to an E&E News analysis of the FEMA data.
The increases will be particularly steep across coastal Florida and coastal Louisiana, where people also are facing huge increases in the premiums they pay for homeowners’ insurance. Flood insurance is sold separately from homeowners’ coverage, and FEMA sells 90 percent of the nation’s flood policies through its NFIP.
The FEMA price hikes are a result of the agency’s decision in the 2010s to restructure the NFIP to make each premium reflect more accurately each property’s flood risk and to eliminate some discounts.
The restructuring, called Risk Rating 2.0, will take more than a decade to complete as rate increases are phased in each year until every policyholder is paying a premium that reflects the full flood risk of their home or business.
The new rates started taking effect in 2021 — drawing protests from some lawmakers — and are part of a larger effort by FEMA to alert the public about the growing threat of climate change.
“All of this, I believe, is having a significant impact on getting people to better appreciate their flood risk not just around the nation but in their neighborhoods, and that’s a good thing,” David Maurstad, a senior FEMA official in charge of the flood insurance program, said in an interview Tuesday.
