Giving Compass' Take:
- The Federal Emergency Management Agency is recalculating flood insurance premiums to include more areas.
- How will flood insurance and flood data change and shift as climate change worsens?
- Learn about improving flood insurance.
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As the Federal Emergency Management Agency recalculates national flood insurance premiums to include more accurate data, insuring property in places like Valley City, Illinois, which was recently underwater because of another flood from the Illinois River, may not be financially possible for some residents," reports Kery Murakami of Route Fifty. "After FEMA made changes to how it sets premiums for the 5 million policyholders in its National Flood Insurance Program, homeowners in Valley City, an area that's hit a major flood stage seven times since 2002, will be seeing a major jump in their premium to cover their damages. . . . Over roughly the next ten years, the 91 single-family homeowners in Pike County, where Valley City is located, will see their premiums rise six-fold from $699 to $4,933."
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."
Read the full article about flood risks and flood insurance by Heather Close at The Rural Blog.