climate change

FEMA Changes to Flood Insurance Renewals Now Factor in Sea Level Rise

The change already happened for new policyholders in October 2021.

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Climate change and sea-level rise make South Florida properties more vulnerable and more expensive for the new flood insurance coverage. 

Beginning April 1, Florida homeowners will pay a different price when they renew their flood insurance policy. Some will save money, but many more will pay more in South Florida. 

The cause? FEMA changed how it calculates risk in its National Flood Insurance Program, calling it “Risk Rating 2.0.” The old rates were based mostly on the elevation and location of a certain property. Now the rate will factor in much more, like rainfall, sea-level rise, and the cost to rebuild the property if destroyed. 

The change already happened for new policyholders in October 2021.

According to FEMA data analyzed by NBC 6 Investigators when they rolled out the first phase, more than 120,000 policyholders in Monroe, Miami-Dade, and Broward counties will save money.

However, almost 450,000 policyholders will see their premiums increase. On average, the increase will be $120 per year, but expensive homes in risky areas will be higher. 

NBC 6 spoke with Sotheby’s realtor Jay Granieri in Fort Lauderdale, zip code 33301, to understand how this would impact the housing market. 

“The rising tide, as we call it, of Florida has always been a concern,” Granieri said. 

According to the FEMA data, the numbers in zip code 33301 are: out of 6,030 total policies, 272 policies will save money, and 5,758 policies will have to pay more in premiums. 

“It’s just one more thing to add to the list that’s making affordability very difficult,” Granieri said. 

NBC 6 has covered how heavier rainfall, a higher water table, and sea-level rise will make South Florida harder and more expensive to live in. 

FEMA policies have not been updated in 50 years and the update was delayed a bit by the Trump Administration. Despite calls by Florida Sen. Marco Rubio and others, the Biden Administration has no plans to delay the changes. 

One major reason is that FEMA has paid out more than $30 billion in claims more than it’s taken in with premiums.  

FEMA leaders told NBC 6 earlier this year that the formula change will be more accurate and shift the burden away from low-value properties to more expensive properties in risky areas. 

“I can confidently say that prices are fair and reflect the property's unique flood risk,” said David Maurstad, Senior Executive of the National Flood Insurance program. 

Granieri tells NBC 6 that more affluent places will see the changes first but time will tell if ripple effects impact other neighborhoods. 

“If it does impact people in less affordable, income restrained areas, then we could have a big problem,” said Granieri. 

In total, four out of five properties in Florida will see an increase. The most expensive properties in the most vulnerable areas could see up to an 18% increase in rates - the maximum increase allowed per law every year. 

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FEMA staff tell NBC 6 they will send a letter notifying individual policyholders of the change 45 days before their renewal comes up. 

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