Homeowner insurance rates in the seven states in Helene’s path — namely Florida, Georgia, South Carolina, North Carolina, Kentucky, Tennessee and Virginia — went up by an average of more than 27% from 2018 to 2023, according to S&P Global Intelligence. The price hikes have also been steep for flood insurance. FEMA, which manages the National Flood Insurance Program, in 2021 rolled out Risk Rating 2.0, an update to how it sets rates that was meant to make the program actuarially sound.
In the first year after the update, 75% of primary residences covered experienced an increase of 18%, the statutory limit, Benjamin Keys, a professor of real estate at the University of Pennsylvania’s Wharton School, testified to Congress in 2023. Half of all policyholders will see their premiums more than double after five years, Keys predicted in his testimony. Higher costs have led some people to drop their policies.
But that is a big gamble. Flooding is the most damaging of all perils. It has cost US taxpayers more than $850 billion since 2000 and is responsible for two-thirds of the costs from all natural disasters, says Flood Defenders, a nonprofit flood insurance advocacy organization. FEMA estimates that a single inch of floodwater in a home can cause $25,000 in damage.
