Changes to the main U.S. flood insurance program will raise rates for 77% of policyholders, according to a new study issued on Tuesday, although property owners in some poorer neighborhoods will see premiums decrease. 

The study by the QuoteWizard unit of financial services provider LendingTree, Inc. reviewed price changes due for the roughly 5 million participants in the National Flood Insurance Program, set up in 1968. 

Under the new “Risk Rating 2.0” system from the U.S. Federal Emergency Management Agency (FEMA) taking effect October 1, new premiums will be based on a property’s value, risk of flooding and other factors, rather than simply on a home’s elevation. 

Meant to account for climate-change-driven shifts like increasing flood frequency, the new plans also will make the program more equitable, said Nick VinZant, QuoteWizard senior research analyst. 

“Now the smaller, lower-value homes and neighborhoods aren’t going to be funding the mansions anymore,” VinZant said in an interview. 

With the weather impact of climate change worsening, flooding losses are expected to rise.

Recent storms, including Hurricane Ida, have caused massive flooding from Louisiana and Tennessee to New York City. FEMA said it aimed to “equitably distribute premiums across all policyholders” with the changes. Of the roughly 5 million policyholders in the program, 3.3 million will see monthly payments rise up to $10, and 3,199 will see an increase of $100 or more per month, VinZant said.

Meanwhile, 196,000 people will see their monthly premiums fall $100 or more, he added. 

FEMA representatives did not immediately comment on the study. As of April, its flood insurance program provided $1.3 trillion in coverage but has been losing money. 

The proposed changes have drawn concerns in the U.S. Congress, including from representatives from Louisiana and Texas, who have asked FEMA to delay the new rates to avoid higher bills for some policyholders. 
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