Many Texans will see flood insurance rates increase under FEMA's new policy

HOUSTON, Texas (KTRK) -- Phase 1 of FEMA's new policy on the way flood insurance is priced begins on Oct. 1, 2021. Under the new policy, Risk Rating 2.0, many Texans will soon see a monthly increase in their flood insurance rate. FEMA estimates that 86% of policies in Texas will see some sort of increase.

FEMA said the new policy will be a more equitable way of calculating rates based on the risk of the policy holder's property.

Anna Weber, a senior policy analyst with the Natural Resources Defense Council, explains how rates will be calculated under the new policy.

"Previously, rates are basically set just on whether or not you are in the mapped flood plain. You are either in or out. Under the new method, it's a lot more individual. If your individual property's risk is higher or lower, that will be reflected in your rates. One result of this change, because it is more individual to your specific property, means that if you have a less expensive home, you are no longer going to be subsidizing the flood insurance of people who live in more expensive homes, all other things being equal," explained Weber.

Weber went on to explain this is the first major change to how flood insurance rates are calculated since the 1970s. If you already have flood insurance, you will not see any changes to your rate until 2022.

"The change that goes into effect on Oct. 1 is only for new policies. So if you are buying a new home and you need flood insurance for the first time, the new rates will go into effect tomorrow. For existing policy holders, there won't be any changes until April and then it's going to be when you go ahead and renew your policy for the next year," explained Weber.

Here's a look at the projected first-year premium changes across Texas.

According to FEMA:

  • 14% of policies will decrease in cost
  • 79% will increase $0-10 per month
  • 4% will increase $10-20 per month
  • 3% will increase more than $20 per month


In Harris County, FEMA reports there are 334,287 total flood insurance policies.

Of those, 37,828 will decrease in cost; 287,307 will increase 0-$20 per month, and 9,152 will increase more than $20 a month.

You can find out more information and look at the way rates are changing across each zip code on this dashboard.
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