Most Floridians will get temporary reprieve from expected hike in flood-insurance rate
homeowners already have been slammed with rising windstorm insurance rates this year but they’re likely to get an unexpected reprieve on protection against the other major hurricane threat.
Federal flood-insurance rates were poised to spike dramatically this year in Florida and other coastal states but that appears to be on hold for most homeowners because of pushback — at least for this year.
The Federal Emergency Management Agency, which controls the National Flood Insurance Program, has been telling floodFlorida insurance brokers for weeks that the planned rollout of new (and for Floridians, potentially much higher) rates won’t happen all at once in October as originally planned.
FEMA now plans that only new policies will be subject to the new rate structure, known as Risk Rating 2.0, on October 1. Everyone who already has a
flood-insurance policy won’t see a rate change until April 2022.
Del Schwalls, immediate past chair of Florida Floodplain Managers Association, confirmed to the Miami Herald that FEMA has told his members of this change in the scheduled rollout.
“That is the only delay I’m aware of,” he said.
FEMA declined to confirm or deny that the agency was considering a delay, which was first reported in Politico this month.
“FEMA currently is finalizing its planned release of Risk Rating 2.0. Once that process is complete we will announce specifics related to the National Flood Insurance Program’s new rating system. At this time, any information would be predecisional, and as such, it would be inappropriate to comment further,” David Maurstad, senior executive of FEMA’s National Flood Insurance Program, said in a statement.
Risk Rating 2.0, the biggest revamp of the federal flood-insurance program in decades, is meant to set new prices that align with the flooding risk that homeowners face. That could mean lower rates for some homeowners, but experts say it will likely lead to higher rates for coastal homeowners. Florida, which holds about a third of all flood policies nationwide, could see some of the biggest impacts.
The overhaul has been in the works for years for a federal system that has run billions in the red because of the massive losses from a string of storms, starting with Hurricane Katrina in 2005, which caused more than $125 billion in damage, much of it in flooded New Orleans.
The new system is expected to be a more accurate view of flood risk, one that takes rainfall and searise-driven tidal flooding into account and doesn’t set rates solely on whether a building is in a flood zone.
The program was initially set to debut in October 2020 but was delayed a year under political pressure. Politico reported that political pressure, this time from the Biden administration, was yet again the reason for a delay.
Raising rates is politically unpopular on both sides of the aisle, although experts say it’s needed to help the nation adapt to climate change. Currently, any changes to premium prices are capped at 18% a year.