From October 1st, homeowners can increase the premium for their flood insurance.
Typically, home insurance does not cover damage caused by flooding, and most flood insurance is purchased through FEMA’s national flood insurance program, which includes more than 760,000 policies in Texas.
But the agency is preparing an update for the first time in 50 years, promising property owners will pay no more than their share, which is based on the value of their homes.
People tend to think that they will never fall victim to flooding until it happens.
“One of the things that we’ve seen here in Texas with climate change is that it rains more. Especially areas along I-35 and to the east, it rains more. So that means that the likelihood of flooding sometimes increases. ” said the chief meteorologist of Telemundo 39, Nestor Flecha.
Flecha said everyone should be aware of floods and what happens afterwards. He said extreme rains had become more frequent and heavier.
“So essentially there is more moisture in the air. If it rains now, it can rain like a torrent and cause flash floods, ”said Flecha.
And now, for the first time in 50 years, FEMA’s national flood insurance program is revising its flood risk calculation.
“I think there is consensus in Congress and elsewhere that these guidelines do not accurately reflect risk, which is one such financial distress for FEMA’s national flood insurance program,” said Michael Barry, senior vice president of the Insurance Information Institute.
Previously, the flood risk was based on the height of a property and whether it was in the 100-year flood plain or not.
The new methodology, known as Risk Assessment 2.0, takes into account other factors such as the frequency of flooding, distance from a water source and the cost of reconstruction, as well as different types of flooding such as storm surges, river overflows and heavy rainfall.
“We’re actually integrating more variables to create an individual risk assessment for each home. So a house that has a lower value has a lower flood insurance premium and vice versa. If a house has a higher value, its flood insurance will reflect the higher value of its house, which makes it fair across the board, ”said GILBERT GIRON, FEMA’s regional flood insurance liaison.
According to data provided by FEMA to NBC 5, 14% of policies in Texas will see an immediate decline once Risk Rating 2.0 goes into effect.
But 80% of policies will see increases of up to $ 120 per year, and 4% of policies will see increases of 120 to $ 240 per year.
“If you have an extension after October, you have the option to either stick with the existing program or if you receive an offer and find that your premium is actually reduced, you can opt for 2.0 your extension date,” explained Giron.
FEMA has said until now that policyholders have seen premium increases every year. After the changes made on October 1st, the annual increases will eventually cease.
All existing guidelines will be changed by April.