New rates for flood insurance put on hold
WASHINGTON — One of the federal government’s main efforts to push Americans to prepare for climate threats is in question after the Senate majority leader’s office objected to a plan to adjust flood insurance rates.
The Federal Emergency Management Agency was preparing to announce new rates for federal flood insurance April 1 so the prices people pay would more accurately reflect the risks they face. The change would likely help reduce Americans’ vulnerability to floods and hurricanes by discouraging construction in high-risk areas. But it would also raise insurance costs for some households, making it a tough sell politically.
Last week, the office of Majority Leader Chuck Schumer, D-N.Y., pushed back on the changes, according to several people familiar with the discussion. That pushback has caused FEMA to pause the rollout of the new rates.
Schumer objected to the flood insurance overhaul when it was announced in 2019, citing its potential to raise costs for people on Long Island. The new system would mean steeper rates for some high-value homes, and the southern shore of Long Island includes the Hamptons, which have some of the most expensive real estate in the country.
Schumer’s office told FEMA that the new rates could have a “severe impact” on some communities in New York, according to a person familiar with the conversation.
The person said the senator’s office had asked FEMA to reconsider going forward with the plan and asked the agency for a followup meeting.
“FEMA shouldn’t be rushing to overhaul their process and risk dramatically increasing premiums on middle-class and workingclass families without first consulting with Congress and the communities at greatest risk to the effects of climate change,” Alex Nguyen, a spokesperson for Schumer, said in a statement. “Congress and the Biden administration must work together in a collaborative and transparent process.”
In a statement, a FEMA spokesperson, who asked not to be identified, said the agency would continue to work with Congress to implement the plan, saying the changes would make insurance rates “better reflect an individual property’s unique flood risk.”
The objections from Schumer’s office create a political quandary for the Biden administration, which has committed to address climate change. Unlike rejoining the Paris Agreement or banning drilling on public lands, increasing the cost of flood insurance is unlikely to generate a positive response from voters.
But flood insurance is one of the most powerful tools the government has to limit the damage done by climate change, by influencing how and where Americans build homes. And even if the administration succeeds at reducing U.S. greenhouse gas emissions, the buildup of those gases already in the atmosphere means that floods and hurricanes will continue to worsen for the foreseeable future.
That means the government must focus on warning homeowners about the flooding threat, according to climate and disaster experts. That encourages people to take steps to reduce their exposure, such as elevating their homes or moving.
“Premiums should be based on risk, so people can have accurate signals about the nature of the hazards they face,” said Chad Berginnis, executive director of the Association of State Floodplain Managers. “I really hope Congress is able to engage constructively here.”
Under the new approach, 23 percent of households with flood insurance would see their rates fall right away, by an average of $86 a month, according to data provided by FEMA, because the updated formula shows they have been overpaying based on their risk. Seventy-three percent would see either no change or an increase of no more than $20 a month.
But for some of the remaining households, costs would go up significantly, according to others briefed on the changes.