As climate risks rise, flood insurance costs stun US homeowners
What’s the context?
A federal flood insurance overhaul to adjust for rising climate change risks has left Americans facing eye-popping bills
- Insurance rate hikes kick in after FEMA risk overhaul
- In storm-prone Louisiana, one locality sues
- Flood insurance already unaffordable for many
NEW ORLEANS - Homeowner Tommy Becnel has never had a flood claim on his house in the hurricane-prone U.S. state of Louisiana, but his annual insurance premium is still set to rise 10-fold, to nearly $7,000, in the years ahead.
FEMA says the new rating system better reflects the risk facing individual properties, and that changes to its National Flood Insurance Program (NFIP) - established in 1968 - are needed as climate change makes storms more frequent and intense.
The NFIP covers nearly 5 million policyholders and about $1.3 trillion in buildings and contents. It is the main source of residential flood insurance in the United States.
As climate-change-fueled disasters worsen, insurance against them is becoming unaffordable or hard to find in growing parts of the United States, leaving many families, organizations and governments at increasing financial risk.
FEMA says its new flood risk ratings system is intended to include factors beyond a building's elevation and risk zone, such as its proximity to water, the building type, the frequency of floods and potential rebuilding costs.