Poorer Americans Dropped Federal Flood Insurance When Rates Rose

When the US Federal Emergency Management Agency overhauled rates for millions of homeowners in the National Flood Insurance Program (NFIP), in 2021, the goal was to end decades of underpricing and to align premiums with real flood risk, driven higher by climate change. Critics warned, however, that higher, more honest prices could push homeowners — particularly poorer ones — out of the program and potentially leave them without an emergency safety net.

A paper published Tuesday in the Journal of Catastrophe Risk and Resilience finds that those concerns have materialized. It estimates that Risk Rating 2.0, FEMA’s 2021 update, resulted in up ...