In 2019, FEMA said it would instead price flood insurance based on the particular risks each property faces, a change the agency called “Risk Rating 2.0.” After a delay by the Trump administration, the new system will go into effect next month for people purchasing flood insurance. For existing customers, prices will increase from next April.
The change has been applauded by a group of advocacy groups including climate resilience experts, environmentalists, the insurance industry and budget watch group Taxpayers for Common Sense.
“With the threat of natural disasters rapidly escalating, the 2.0 risk rating is a much needed and timely change,” said Laura Lightbody of Pew Charitable Trusts, which has pushed governments to respond better to climate threats. The higher insurance costs, she said, were “a reflection of our new wet reality”.
But the financial consequences of this new reality will be staggering for some communities.
The flood program insures 3.4 million single-family homes across the country. For 2.4 million of those homes, rates will not increase by more than $ 120 in the first year, according to data released by FEMA, which is similar to annual increases typical of the current system. 627,000 additional housing units will see their costs drop.
But 331,000 single-family homes across the country will face a significant increase in costs. Over 230,000 households will see increases of up to $ 240 in the first year; 74,000 additional households will see their costs increase to $ 360. For about 25,000 single-family homes, the additional costs could reach $ 1,200.
Almost half of those 25,000 households are in Florida, many of them along the high-risk barrier island chain that stretches from St. Petersburg south to Fort Myers.