For the people of Rhode Island, an increase in flood insurance rates is coming, possibly as early as next year. And, perhaps surprisingly, to landowners inland as well as those along the coast.
“It doesn’t matter if you believe in climate change; your insurance company does it, ”Nick VinZant, senior research analyst for QuoteWizard, an affiliate of an online mortgage company, recently told the Washington Post.
For the first time, the Federal Emergency Management Agency (FEMA) is on the verge of integrating climate risk into the cost of flood insurance. The impact will be a dramatic increase in the cost of flood insurance. In Rhode Island, many policyholders will see their premiums rise and continue to rise by up to 18% per year for the next 20 years.
At this rate, a flood policy that costs $ 1,000 today could cost $ 5,230 in 10 years and an incredible $ 27,400 in two decades.
The new assessment, titled Risk Rating 2.0: Equity in Action, will more accurately reflect the threat of flooding in a changing climate, federal officials say.
Most Rhode Island homeowners will see a modest increase in their flood insurance, starting at $ 120 a year on top of what they already pay. Others will actually see their insurance costs decrease as flood insurance rates are distributed more evenly and wealthy homeowners pay a more equitable share of the burden. In fact, some wealthy homeowners could see their insurance costs go up to $ 14,400 per year.
VinZant also told the Washington Post that the current system is not fair. He said moderately priced homes were overinsured and million dollar mansions were underinsured. Middle-income policyholders helped subsidize the rich.
The First Street Foundation developed the new flood risk assessment system. This new technology allowed analysts to study the surroundings of each home and led to an astonishing discovery: Homes inland, even in states like Vermont and Iowa, are threatened by the increase flooding caused by the climate crisis.
Homes that were thought to be safe from flooding and that did not require insurance will now need it. Climate change will impact inland landowners who live near rivers, streams and streams. These homes will experience overflows during more frequent and severe rains and storms, as well as price increases in their government-backed flood insurance.
More than 5 million people have government-backed flood insurance, which provides $ 1.3 trillion in coverage in 22,550 communities across the United States, according to the recent Washington Post article. Last year, FEMA’s National Flood Insurance Program was in debt of $ 20 billion.
When First Street launched the new system in June 2020, it discovered 6 million new risky properties that obsolete FEMA models had missed.
“Not only are we seeing the rates change,” VinZant said, “but the number of people who should have flood insurance is astronomically higher than it currently is.”
It is therefore not surprising that the wealthy insured in coastal states are complaining. The Washington Post reported that Senate Majority Leader Charles Schumer, DN.Y., has sought to extend the current system by five years.
Roger Warburton, Ph.D., is a resident of Newport, RI.