|More accurate flood data has changed insurance rates. |
(Photo by Kellly Sikkema, Unsplash)
FEMA's new way of setting flood insurance premiums will "more accurately reflect how much flood risk properties are facing. But in many areas around the country, homeowners will see their premium payments multiply several times," Murakami writes. "Up until now, the premiums had not considered how often an area was expected to flood in the future and didn't consider many types of flooding, like that from heavy rainfall. That's led to an unfair situation in which many owners of properties at risk of flooding have been paying 'peanuts,' said Chad Berginnis, executive director for the Association of State Floodplain Managers. And indeed, Pike County's single-family homeowners had been paying among the lowest rates of any county in the country, according to FEMA data examined by Route Fifty."
Lawmakers say flood insurance only helps if homeowners can afford to buy it. "Some members of Congress from areas where premiums will jump are balking at the prospect of NFIP policyholders paying thousands more for federal flood insurance. Raising premiums so sharply, they say, could discourage people from buying insurance and leave them vulnerable if a flood damages their home," Murakami reports. Federal law caps premium increases at 18%. "Those who are not paying as much as FEMA's new risk assessment says they should be paying will be on what the agency calls a 'glide path' until they reach their new premium level. . . . The agency estimates that the percentage of people paying the amount FEMA believes they should be paying will rise from about a third to 90% over the next decade."
Using a more accurate picture of where flooding has or is likely to occur to set premium costs has supporters. "Some changes should be made, said Berginnis. . . . The new premiums, for example, will not take into account steps property owners take to reduce the threat of flood damage," Murakami writes. "Still, he said, the new flood insurance rates will 'send people the correct signals about flood risk.'