By Charles Elmore

Big changes in federal flood insurance are lowering bills for some but triggering sticker shock for others, agents say — such as the buyer of a Delray Beach commercial property who was quoted a $16,400 annual premium after the previous owner paid $1,100.
“We’ll be having some difficult conversations with clients,” said John Backer, vice president of Gracey-Backer Inc., an agency in Delray. “Potentially it could affect some real estate deals.”
Despite pleas for delay from members of Congress in Florida and other coastal states, the reset known as Risk Rating 2.0 took effect Oct. 1 for new policies issued by the National Flood Insurance Program. Adjusted rates will kick in April 1 for those who renew existing policies.
Nowhere is the impact bigger than in Florida, which — with 1.7 million — has the most NFIP policies of any state. More than 80% of policies in the state will cost more, according to federal projections.
The government-run program remains the dominant provider of insurance for flood damage, which most standard home and business policies do not cover. 
Along Palm Beach County’s southern coast, a minority of people will pay less, a majority in most ZIP codes will pay up to $10 more per month or $120 annually, and some face much steeper costs.
Take the 33483 ZIP code spanning Gulf Stream and the eastern part of Delray Beach. It has 6,024 NFIP policies. Among these, 7% are pegged to cost more than $20 extra each month. A website breaking out the government data does not offer further specifics about how much more.
The biggest portion in the ZIP code, 59%, will pay up to $10 more per month. Another 8.7% will pay $10 to $20 more. About a quarter, 25.3%, will pay less.
The changes come after a long-running debate about whether NFIP, created in 1968, has kept rates too low for some properties deemed to carry higher flood risks, effectively shifting costs to others with lower risks. Proponents say a reworking has been overdue in a time of rising worry about climate change and increased flooding risk.
But prior increases in prices and surcharges stemming from 2012 federal legislation led to complaints the changes caused economic disruption and pushed some people to drop policies. By 2019, nine municipalities in southeastern Palm Beach had fewer NFIP policies than they did eight years earlier, with declines as much as 40%, while three had more policies, a Coastal Star analysis found.
Lenders may require flood policies in designated high-risk zones, but people not carrying mortgages or living in lower-risk areas have a choice.
In September, a bipartisan group of nine U.S. senators including Florida’s Marco Rubio “urgently” requested a delay for the changes in a letter to the head of the Federal Emergency Management Agency, which oversees the flood program.
Senators said they understood FEMA’s own analysis projected nearly 20% of all policyholders nationally, or about 900,000, would drop policies over 10 years. The letter also said FEMA was failing to publicize adequately just how much some premiums could go up — not merely in the first year, but with certain renewing policies, rising 18% annually for five years, 10 years or however long it takes to get to a revised rate.
Under congressional questioning in early October, FEMA Administrator Deanne Criswell said the change “has been implemented” and “already individuals are seeing decreases in their insurance rates, which is the first time that this program has taken equity into account to make sure people are paying for the risk that they have.”
How many will pay less in southeastern Palm Beach County? It can vary a lot.
In the 33487 ZIP code, with 6,223 policies in the Highland Beach and Boca Raton area, for example, 6.5% are forecast to cost less. 
The projected savers rise to 46.5% of 5,736 policies in the 33435 ZIP code for parts of Boynton Beach, Ocean Ridge and Briny Breezes.
In the 33480 ZIP code including South Palm Beach, 27.4% of 9,147 policies are slated to cost less. More than 60% of policies there will cost up to $10 more monthly, another 5.8% are seen as rising up to $20, and 6.1% will top $20 extra.
New prices arrive in the wake of updated federal maps and local efforts to mitigate flood risks. Big price differences can hinge on factors like a property’s elevation and proximity to a body of water. But virtually everyone in the region faces some risk, officials say.
“Every property in the city of Boynton Beach can flood,” that city’s website reminds residents. “You can’t bet on getting disaster assistance after a flood. But you can pay for repairs if you have flood insurance.”
The site further notes “35% of all flood insurance claims in the city of Boynton Beach have been outside the mapped floodplain. Consider purchasing flood insurance, whether your property is in a Special Flood Hazard Area or not.”
For the uninsured, the most common form of federal disaster assistance is a loan that must be repaid with interest, FEMA officials note.
In any case, pricing changes can bring surprises for home buyers coming into a hot market. One Delray Beach home purchaser learned a flood insurance policy that cost $580 per year in the past was now $2,200, Backer said.
That has sent agents and residents scrambling to assess their options. Alternatives can include private insurers, who largely avoided flood risks historically and account for less than 5% of the U.S. flood insurance market in most estimates. In recent years a number of private carriers have stepped up efforts to play a greater role. 
As the effects play out into next year, people near the coast will have to adjust to a new reality.
“In the end, the goal of this is to pay what they should be paying, commensurate to risk,” Backer said. “But that doesn’t mean it is going to be an easy process.”

Cost changes by ZIP codes
Premiums for National Flood Insurance Program policies under Risk Rating 2.0:

33432 (Boca Raton) — 6,995 policies
Paying less: 29.1%
Paying $0-$10 more monthly: 65.4%
Paying $10-$20 more: 3.4%
Paying $20+ more: 2%

33431 (Boca Raton) — 3,009 policies
Paying less: 34.6%
Paying $0-$10 more monthly: 59.3%
Paying $10-$20 more: 3.7%
Paying $20+ more: 2.5%

33487 (Boca Raton, Highland Beach) — 6,223 policies
Paying less: 6.5%
Paying $0-$10 more monthly: 85.2%
Paying $10-$20 more: 6%
Paying $20+ more: 2.3%

33483 (Delray Beach, Gulf Stream) — 6,024 policies
Paying less: 25.3%
Paying $0-$10 more monthly: 59%
Paying $10-$20 more: 8.7%
Paying $20+ more: 7%

33435 (Boynton Beach, Briny Breezes, Ocean Ridge) — 5,736 policies
Paying less: 46.5%
Paying $0-$10 more monthly: 48%
Paying $10-$20 more: 3.7%
Paying $20+ more: 1.8%

33462 (Lantana, Manalapan) — 3,385 policies
Paying less: 35.3%
Paying $0-$10 more monthly: 54.3%
Paying $10-$20 more: 7.3%
Paying $20+ more: 3.1%

33480 (South Palm Beach, Palm Beach) — 9,147 policies
Paying less: 27.4%
Paying $0-$10 more monthly: 60.7%
Paying $10-$20 more: 5.8%
Paying $20+ more: 6.1%

Source: Federal Emergency Management Agency

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