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Charleston City Paper

FEMA Changes Coming, Coastal Insurance Rates Could Go Up

Skyler Baldwin

Sep 26, 2021

Upcoming changes to the Federal Emergency Management Agency’s (FEMA) National Flood Insurance Program (NFIP) are intended to fix existing inequities within the program, according to program leaders. But the changes, starting Oct. 1, will also hike costs for property owners in coastal areas.

“It’s not only the right thing to do, it aligns with the Biden administration’s call to action to deliver equitable programs for all,” said David Maurstad, deputy associate administrator for federal insurance and mitigation and senior executive of the NFIP, said in a briefing on the changes Friday.

Costs are expected to decrease for the vast majority of policyholders nationwide under FEMA’s Risk Rating 2.0 system. Roughly two-thirds can expect to pay less per month. And most of those who will be paying more will see increases relatively small increases, less than 10% of policyholders will see an increase of more than $10 per month.

The figures for individual states look a lot different from the average U.S. changes, according to analysis by QuoteWizard.

As many as 74% of policyholders in South Carolina will see a price increase, the study estimates, and 3% of those will pay an extra $20 or more per month. But 0.2% of policyholders can expect hundreds more per month in insurance costs.

The new system is based primarily on the cost of replacing a home, and in the Lowcountry, where home prices and floodwaters both continue to rise, so too will insurance premiums.

There are five main variables in total taken into consideration:

Historical flood frequency
Flood type, such as river, rainfall, coastal surge, etc.
Distance to water source
Property characteristics, such as elevation and soil composition
Cost to rebuild
According to the study, 208,559 South Carolina policies will be impacted.

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