An article in the New York Times published earlier this week predicted flood insurance rates in flood-prone areas will soon quadruple. Mark Friedlander, the Director of Corporate Communications at the Insurance Information Institute, said that will not happen – at least not for the 90 percent of people who buy National Flood Insurance Program policies.
“In some cases, yes, there could potentially be quadruple rate increases over a very long period. Because the way risk rating 2.0 works is they could only raise rates by 18% a year. That’s the cap that was passed by Congress.”
Friedlander said the FEMA-run program runs a deficit and agency leaders don’t really want to be in the flood insurance business. He said private policies are becoming a better deal.
“In the long run, you're going to be paying much more for FEMA coverage than you will for private market. In fact, according to private flood insurers that we have spoken to their average rates run 20 to 25% less than FEMA rates.”
Friedlander said some in Congress are trying to push FEMA into making changes to the federal flood insurance program, like subsidizing flood insurance in low-income communities.
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