Updates to the way the National Flood Insurance Program under the Federal Emergency Management Agency determines flood risk have impacted insurance rates across Barnstable County, with some homeowners seeing substantial savings.
Policies that began October 1 are subject to the new methods, and existing policy holders could take advantage of the decrease in premiums as of the same date.
New policies to be renewed on or after April 1, 2022, will also be subject to the new rating system, called Risk Rating 2.0: Equity in Action, which is intended to provide equitable insurance rates.
“It transforms a pricing methodology that has not been updated in 50 years by leveraging improved technology and FEMA’s enhanced understanding of flood risk,” a FEMA press release states.
Under the former system, people who have lower-valued homes had been paying more than their share of the risk while people owning higher-valued homes were paying less, according to FEMA.
The new methodology takes into account how much it would cost to rebuild, while it no longer uses flood zones to determine flood risk.
Instead, it looks at flood frequency, different types of flooding (storm surge, heavy rainfall and coastal erosion), distance to water and property elevation.
While the rating system has changed, existing statutory limits on rate increases are not changing and will remain at no higher than 18 percent annually.
Residents of municipalities participating in the Community Rating System will also continue to receive a discount. Under the rating system, municipalities can opt in to earn such discounts on flood insurance. The rating increases depending on different actions taken in a town or city. For example, providing flood map information to residents, enforcing building regulations and protecting wetlands are ways that towns can improve their ratings.
Many Cape Cod towns, including Sandwich and Mashpee, have elected to be part of the Community Rating System. The better a town is rated, the bigger is the discount on flood insurance residents receive.
Nationally, nearly a quarter of policy holders should have seen premium decreases as of October 1. Sixty-six percent of policy holders will have seen increases up to $10.
Of the 1,149 policies in Bourne, 604, or 53 percent, have seen decreased premiums. For 366 policy holders, the decreases are significant, with policies decreasing by more than $100. Another 238 have seen decreases between $0 and $100.
A total of 551 policy holders in town have seen increases between $0 and $100, with most experiencing an increase between $0 and $10. One saw an increase of more than $100.