The Federal Emergency Management Agency (FEMA) is changing how it prices flood insurance, and some Indiana residents will find themselves paying more.
An analysis conducted by Hira Tanweer and Nick Vinzant from QuoteWizard found that 54% of flood policies in Indiana will increase, and 19% of Indiana flood policies will increase by at least $60.
However, not everyone will be affected by the change in a negative way. The study showed that 46% of Indiana’s flood policy prices will decrease, and 32% of the policies will decrease by at least $20.
The change comes after FEMA re-categorized the variables it uses to determine flood risk at specific properties. The new assessment includes historical flood frequency, type of flooding, distance to a body of water, characteristics of the property, and the cost of rebuilding.
According to FEMA’s website, flood insurance is important because 1 inch of water can cause $25,000 worth of damage in homes. Flood insurance covers the physical building and the items inside up to a certain amount, which is dependent on the policy.
Flood insurance is not usually bundled with regular home insurance, so FEMA created the National Flood Insurance Program (NFIP) to help protect homeowners. Some dwellings in areas that are at high risk for flooding are required to have flood insurance.
The QuoteWizard analysis reported NFIP has paid almost $280 million to cover Indiana flood claims so far in 2021. The analysis determined the new flood insurance payments will be more equitable, with lower-value homes paying less and higher-value homes will pay more for flood insurance. The analysis also noted residents can buy flood insurances through private companies as well.
Residents can view FEMA flood maps at fema.gov/flood-maps/national-flood-hazard-layer.