Real estate brokerage firm Redfin published an analysis of the effects of FEMA”s Risk Rating 2.0 on flood insurance policyholders.

Key Takeaways:

  • The two Sun Belt states-which have gained more residents than any other state during the pandemic-are getting hit hardest by FEMA’s price hikes. By comparison, 81% of FEMA policyholders overall are seeing costs increase as a result of the agency’s insurance overhaul.
  • Texas and Florida face substantial flood risk, and have in the past had relatively low flood-insurance premiums.
  • Neighborhoods with higher home prices are the most likely to face jumps in flood-insurance costs.
  • Majority-Hispanic neighborhoods are seeing the highest share of policyholders experience price hikes, followed by majority-white neighborhoods.
  • Most annual premium increases are capped at 18% by law, meaning many policyholders will likely face further price hikes in the future.

The analysis is detailed and breaks down the impacts by neighborhood based median home values, median household income, and by state.


While the data show that the larger increases will be seen for higher value homes and higher income homeowners, increases on the lower end of the spectrum may become burdensome for these homeowners. Higher income homeowners may opt to drop their flood policy altogether and choose to self-insure.


Read the full Redfin Analysis

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