New policies, however, will see the full increase immediately.įEMA has only released data on the first year of rate changes. The changes will go into effect gradually over the coming years, as premium increases are capped at 18% annually for existing policies. One of the unintended consequences, Porter says, is low-income communities like Lawrence seeing massive premium increases. The government says the new rating system is more equitable, setting the highest rates for the people at the most risk. The new updated models predict major floods could happen in Lawrence every 20 years, driving up rates. Jeremy Porter, a demographer who studies the implications of flood insurance with the nonprofit First Street Foundation, called Lawrence "an example" of what is happening to people across the country as the government switches to the new rating system.įirst Street Foundation, a New York nonprofit, has warned for years that the old government models understated the real risk of flooding, especially amid climate change and rising sea levels. But some could pay thousands of dollars more a year.
FEMA says only a small percentage of policyholders will see major increases under Risk Rating 2.0.
homeowners, including for residents of many inland communities like Lowell and Lawrence. That means flood insurance rates are changing for millions of U.S. The new system takes into account an array of factors beyond flood hazard maps, including the number of claims made historically on a property, proximity to a body of water and municipal infrastructure designed to divert floodwaters. And that in turn often encouraged people to build - and rebuild - in areas vulnerable to floods, advocates say.īut after years of debate, the government switched to a more sophisticated system for determining premiums, called Risk Rating 2.0, in October. The premium increases mark some of the biggest changes since the National Flood Insurance Program was established in 1968 - a way to help homeowners in places where insurance was either too expensive or unavailable.įederal officials and environmental groups say the old rating system was outdated, often based on little more than a home’s location on a flood map, and sharply underestimated the risk faced in communities across the country. And under the new system, Lawrence is one of the cities facing the most dramatic increases in Massachusetts. It was the product of a new risk-rating system used by the federal government to determine flood insurance premiums.
What am I doing wrong here?' "īut it wasn't an error. "I've done this for years, and I said, 'Wait a minute. One customer who previously paid $300 a year in flood coverage just got a new quote for $5,770. 1, Silverio said the cost of flood premiums seemed to go haywire. The city has three rivers running through its center - the tributary Shawsheen, Spicket and Merrimack rivers - and many properties at low elevations.īut on Oct. He said it's long been common for homeowners here to pay several thousand dollars a year for flood insurance. Sitting in his office a stone's throw from the Merrimack River in Lawrence, insurance agent Evan Silverio marveled at the numbers on his computer screen. The Merrimack River runs over the Great Stone Dam and underneath Broadway in Lawrence.
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