Current and full-risk flood insurance premiums and their affordability, by county
GAO-23-105977, July 31, 2023
The National Flood Insurance Program (NFIP) has competing policy goals: remaining fiscally solvent while keeping flood insurance affordable. However, a historical focus on affordability has come at the expense of solvency. Since 2005, NFIP has borrowed $36.5 billion from Treasury to cover shortfalls.
To modernize its ratemaking process and better align rates with underlying flood risk at the individual property level, the Federal Emergency Management Agency (FEMA) developed a new methodology, called Risk Rating 2.0. Implementing Risk Rating 2.0's full-risk premiums, which represent an individual property’s estimated claims and insurance costs, will require current (December 2022) premiums to increase for most policyholders. This transition will help move NFIP toward fiscal solvency, but also amplify affordability concerns.
This map displays county-level data as of December 31, 2022, to show how expected premium changes are geographically distributed. It also displays the affordability of current and full-risk premiums as a percentage of household income, and the percentage of occupied households with an NFIP policy (or “takeup”).
How to Interact With This Map
This map contains several data sets, each of which you can view by clicking on the corresponding radio button in the box in the upper-right-hand corner of the map. Hovering your cursor over a particular county will display a pop-up window containing the values from every data set for that county.
Source: GAO analysis of Federal Emergency Management Agency, Census Bureau and United States Geological Survey data.
Notes: FEMA determined full-risk premiums for policies subject to Risk Rating 2.0, which includes new policies beginning October 1, 2021, and renewed policies beginning April 1, 2022. We analyzed policies in effect on December 31, 2022, which included full-risk premiums for about 89 percent of all NFIP policies.
For more information, read our report, GAO-23-105977.