Flood insurance is already difficult to afford for many homeowners in New York City, and the situation will only worsen as flood maps are revised to reflect current risk and if the federal government continues to move toward risk-based rates, according to a first-of-its-kind study by the RAND Corporation.
Flood insurance is already difficult to afford for many homeowners in New York City, and the situation will only worsen as flood maps are revised to reflect current risk and if the federal government continues to move toward risk-based rates, according to a first-of-its-kind study by the RAND Corporation.
RAND researchers found that flood insurance is currently difficult to afford for 25 percent of the households in owner-occupied one- to four-family residences in New York City's flood-prone areas. That percentage is projected to rise to 33 percent if proposed updates to the Flood Insurance Rate Map (FIRM) are adopted, special rates for older homes are eliminated, and grandfathering provisions allowing rates to be based on the old rather than the updated FIRM are dropped.
The primary source of residential flood insurance is the National Flood Insurance Program run by the Federal Emergency Management Agency (FEMA). The FIRM for New York City is being significantly updated by FEMA for the first time since it was adopted in 1983 and adjusts the flood elevations to reflect today's risks.
The portion of people purchasing flood-insurance (the take-up rate) in the study area is about 43 percent—higher than when Hurricane Sandy struck in 2012—but even those property owners with insurance are not fully covered for flood-related losses. Yet as the cost of flood insurance climbs, take-up rates will likely fall, which will reduce the resilience of households and communities to rebound from flood events.
Read more at Rand Corporation
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