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National Flood Insurance Is Changing. Some Homeowners Face Huge Premium Increases

National Flood Insurance Is Changing. Some Homeowners Face Huge Premium Increases

Arian Campo-Flores of The Wall Street Journal reports that the National Flood Insurance Program is updating its pricing methodology.

The C3 Take
  • The National Flood Insurance Program (NFIP) has recently overhauled its pricing methodology to have premiums more accurately reflect flood risk.
  • Previous pricing of NFIP premiums did not accurately reflect flood risk which incentivized poor building practices and more people living in harm’s way, leading the program to accumulate $20 billion of debt.
  • While costs of premiums may increase, having more accurate rates puts the onus of flood risk on property owners rather than taxpayers across the country.

“The National Flood Insurance Program—the main provider of flood coverage in the U.S., with more than five million policies—is rolling out an overhauled pricing method starting Friday in an effort to reflect more accurately the flood risk that individual properties face. The issue has gained importance with climate change, which scientists say is fueling sea-level rise and contributing to more-severe weather.”

Read the full article here.

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