Poor Homeowners Will Pay Less after Flood Insurance Overhaul

By Thomas Frank.

An upcoming overhaul of the federal government’s flood insurance program will financially benefit many of the nation’s lowest-income communities by cutting premiums for a large share of their residents, an E&E News analysis of government data shows.

But the restructuring will be costly for some affluent coastal communities as the National Flood Insurance Program starts charging higher rates for houses that are expensive to replace or are vulnerable to rising sea levels and intensifying storm surge.

E&E News’ analysis of newly released government data provides the most detailed insight yet into the impact of an unprecedented restructuring that will make premiums in the nation’s main flood insurance program reflect more accurately the risk facing 5 million properties.

The restructuring, called Risk Rating 2.0, is raising concerns among some members of Congress that flood insurance will become too expensive for millions of people when the new rates take effect, starting in April. Environmental advocates say the new premium structure will deter risky development in flood zones.

Under pressure from lawmakers, the Federal Emergency Management Agency recently released data showing the number of policyholders in every ZIP code who will face rate increases and the number who will see their rates decrease.

READ MORE at scientificamerican.com