Flood insurance policy levels rise citywide, despite decline in Queens – Spectrum News NY1
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The number of federally backed flood insurance policies is rising slowly across the city, powered by jumps in Manhattan and Brooklyn, even as Queens — where the remnants of Hurricane Ida caused significant flooding and 13 deaths last year — saw a decline, according to new data from the Federal Emergency Management Agency.
Manhattan and Brooklyn combined saw 3,450 new policies since 2021, offsetting losses in Queens and Staten Island, and essentially flat numbers in the Bronx. The city as a whole saw 3,151 net new policies over last year, putting the five-borough total at 56,265.
The policy levels are growing as many residents are seeing increasing risk from inland flooding caused by intensive rain. Officials and insurance experts with FEMA, the city and local nonprofits said they believed the uptick is due in large part to their ongoing efforts to educate homeowners and renters about the importance of flood insurance.
Yet they also expressed concern over the yearslong decline in Queens and the overall low rate of policies, which are only required for a relatively small number of structures along the coast. Indeed, the city has about 1,800 fewer policies now than it did in 2014, in the wake of Superstorm Sandy.
They are concerned that New Yorkers who pay for flood insurance voluntarily are jettisoning their policies amid rising inflation and a grim economic outlook, especially after a change to FEMA’s program last year that made optional policies more expensive.
“This is the blue-collar middle class: civil servants, police personnel, people with small businesses,” said Elizabeth Malone, a program manager for resiliency and insurance at NHS Brooklyn, a nonprofit affordable housing developer. “This is where the margins start to get real tight, and where the thousand-dollar difference can determine whether they can afford a home.”
In recent years, NHS Brooklyn, alongside the Center for New York City Neighborhoods and the Mayor’s Office of Climate and Environmental Justice, have hosted webinars, spoken at community board meetings and handed out literature in communities to increase awareness of the flood program. FEMA helped fund an advertising campaign in the city for flood insurance as well.
“I want to take some credit for this,” Malone said of the rising policy numbers in Brooklyn. “We have been pounding the education on flood insurance.”
Malone has been urging people to get policies as soon as possible, before a planned expansion of FEMA’s mapped flood zone, in 2024, ropes them into the mandatory insurance area.
Currently, people in the so-called “moderate” flood risk area, where insurance is optional, have the opportunity to purchase lower-cost policies, such as those that don’t cover the contents of their home. But when their home gets included in the official flood zone, Malone said, their mortgage lenders will require them to pay for the full $250,000 maximum payout for structural damage offered by FEMA’s program.
Buying now, Malone said, will allow them to take advantage of the 18% limit on year-to-year growth in their premium, like living in a rent-stabilized apartment.
Malone said she was concerned that the loss of policies in Queens and Staten Island could be coming from people who have dropped policies they purchased after Superstorm Sandy, a move she called “inadvisable.” Homeowners who have accepted federal flood disaster grants in the past, she said, cannot receive further grant funding if they do not have flood insurance.
Last year, FEMA introduced a new system for calculating flood insurance premiums, called Risk Rating 2.0. Now, premium costs are not based solely on whether a home falls within FEMA’s map of risk from a major coastal storm, but come from a combination of factors: the home’s structure, such as whether it has a basement; the cost to rebuild it; and the likelihood it faces other flood risks, such as from rain.
Malone and other insurance experts have supported the new system, saying it better reflects the actual costs to insure, and could help FEMA’s program shed its billions of dollars in operating debts.
But city officials predicted an affordability crisis, and now say they are waiting for further data from the program to determine whether the new risk ratings led households to shed their policies.
“If this is something that is out of reach financially, they may choose to drop it, because maybe they haven’t experienced a flood recently, or maybe Ida wasn’t as severe in their neighborhood,” said Tallant Burley, a senior policy advisor with the Mayor’s Office of Climate and Environmental Justice
People who live inside the coastal flood zone are required by federal rules to have a FEMA policy in order to have a mortgage for their homes. But the changes eliminated a popular option for the program, termed “preferred risk,” which was a lower-cost policy for people outside the mandatory insurance area.
Nationally, FEMA insurance policies are going down, and it is not clear from available data whether a rise in privately backed flood insurance policies is keeping up, said Chad Berginnis, the executive director of the Association of State Floodplain Managers.
“When people saw those rate changes, they decided, unfortunately, that to them the hazard was the flood insurance policy, not the flood,” Berginnis said.
There is also still an information gap on flood insurance, Burley said. Many homeowners people in her office have spoken to, she said, incorrectly believed they were not eligible for flood insurance, or that their homeowners or renters insurance will cover flood damage.
The rise in policies citywide was a “pleasant surprise,” Burley said.
“It’s not a huge increase, but it is something,” she added.
Michael Moriarty, FEMA’s regional director for New York and New Jersey, said that the agency is still analyzing which kinds of policies have been dropped, and what is contributing to people leaving the program. He said that government agencies at every level need to pilot new incentives and affordability programs, such as property tax rebates, to spur new policies, as well as start limiting development in flood areas.
“If we keep increasing the number of repetitively lost property, we’re not going to be able to reduce the cost of the program, and make it more affordable,” Moriarty said.
Donovan Richards, the Queens borough president, said he is concerned that without additional infrastructure or financial assistance, loss of policies in his borough will push people out of their neighborhoods in the event of another major storm or downpour.
Insurance experts said they were not aware of affordability measures in the works in city or state government. Congress is considering tying premiums to income, and further limiting how much a policy’s cost can grow each year.
The communities that may be hit hardest, Richards said, are likely working class, Black and Latino areas that were built without proper infrastructure to handle stormwater, and where people do not have significant savings to rebuild on their own.
“We need to be deliberate and thoughtful in making sure we’re not pushing people out of their communities,” Richards said.