Nearly 450,000 flood insurance policies in Monroe, Miami-Dade and Broward counties will see premium increases next year when FEMA moves to its new “Risk Assessment 2.0” methodology. The new formula takes into account sea level rise, the risk of flooding, the amount of rainfall, the cost of reconstruction, as well as other aspects for the properties.
The change is already in place for new policies and will go into effect for renewals in April 2022. The change will impact South Florida due to the growing threat of sea level rise and higher rainfall. abundance caused by climate change.
The change also shifts the financial burden to high-value properties, which are more expensive to rebuild. Federal Emergency Management Agency (FEMA) leaders say lower-value properties have shouldered too much of the financial burden. That means about 125,000 policyholders in Miami-Dade, Broward and Monroe counties will see their premiums go down. These reductions have already taken effect.
According to an analysis of ZIP code data by NBC 6 investigators, five of Florida’s top 10 ZIP codes with the highest increases are in Miami-Dade County. Thousands of premiums will increase for flood policies in ZIP Codes 33175, 33186, 33157, 33032 and 33033. The majority of increases will be $120 per year. Many of these policies could also have seen increases with the old methodology.
ZIP codes inland and on the heights of North Miami and Miami Gardens – 33055, 33056 and 33161 – will see more premiums drop. Under the old FEMA methodology, these declines would not have occurred.
Federal law caps a premium increase at 18%.
Palmetto Bay and Cutler Bay
Postal code 33157 is shared between the village of Palmetto Bay and the town of Cutler Bay. Most city dwellers are required by FEMA to have flood insurance. Jim Deegan has lived in one of these neighborhoods since 2006.
“The water will fill up and you can see the debris that’s in the grass,” Deegan said, pointing to a pile of street debris about a dozen feet away. After a heavy rain, he said the floodwater would sit for an hour or two before flowing into storm drains and emptying into the ocean.
Like many houses in the neighborhood, her house has a tarp on the roof that still covers a leak caused by Hurricane Irma four years ago.
“My insurance company people and I fought through a lawyer,” Deegan said.
His property is one of many likely to pay more premiums next year. Deegan wanted to know more, but was frustrated that the cost could rise on top of unusually high inflation which was already impacting homeowners.
“Everything is going up right now,” Deegan said.
Cutler Bay Mayor Tim Meerbott told NBC 6 that most townspeople would see an increase of $120 to $300 a year.
“We went to FEMA first to see if they could back out. It fell on deaf ears,” he said. “Certainly they are doing the whole country so that I can understand this.”
Local communities have little control over rate increases, but they can apply for the Community Rating System (CRS), which allows people to get discounts on flood insurance. In short, the CRS shows that the community has taken flood mitigation and resilience measures to defend their area against major events.
Each community is rated from 1 to 10, with one being the best. Cutler Bay has a class four rating which can give homeowners up to 30% off their flood insurance. To achieve this, the city must go through a long process, systematically cleaning storm sewers and completing multimillion-dollar construction projects to help fight the floods.
On October 1, FEMA is rolling out its new “Risk 2.0” flood insurance program that will factor in rainfall, storm surge and the cost of reconstruction into premiums. Reporting by Phil Prazan of NBC 6.
Cutler Bay is currently undergoing a $3 million project to widen the Bel-Air Canal and replace the Caribbean Boulevard Bridge.
The CRS alone cannot stop many of these premium increases, but the mayor said it helps.
“FEMA does all the ratings for all the insurance companies that you can’t really shop for. It is what it is depending on where you live and the value of your home,” Meerbott said.
Palmetto Bay Village is a Class 8 CRS and can save homeowners 10% on flood insurance rates. The community invests about $150,000 a year to clean the sewers, and this year village leaders have invested more money in pruning trees so that branches don’t clog the flood mitigation system.
“Insurance premiums are always a concern when you live near the coast,” Palmetto Bay Mayor Karyn Cunningham wrote. “The Village has invested in several initiatives that will help reduce our CRS score to save money for residents.”
Mayors Cunningham and Meerbott say state and federal funds are needed for major flood control projects.
FEMA leaders say it’s about risk and fairness
In a press call ahead of the first phase of the change, David Maurstad – a senior official with the National Flood Insurance Program – said the change will more accurately reflect flood risks over the coming decades.
“We are moving away from the rather static measurement of the 1970s of simply looking at the elevation of property in an area on a flood insurance rate map, to now incorporate multiple flood variables,” Maurstad said. . “River overflow, storm surge, coastal erosion, heavy rain, distance to water source.”
If insurance premiums go up, it means the property is at higher risk of future flooding, he said.
County and zip code data is available via FEMA Online Portal.
According to FEMA documents, the change will impact policies across Florida. One in five policies will see a decrease in monthly payments. Four out of five will see an increase.