Amy Tripp at her new home in Big Pine Key, Florida. She closed early to buy it before federal flood insurance rates rose by thousands of dollars. Her rate will still go up more slowly over time.

Saul Martinez for NPR

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Amy Tripp at her new home in Big Pine Key, Florida. She closed early to buy it before federal flood insurance rates rose by thousands of dollars. Her rate will still go up more slowly over time.

Saul Martinez for NPR

The cost of federal flood insurance is rising for millions of homeowners, threatening to make homes in coastal areas unaffordable for many. The Federal Emergency Management Agency says its new rates better reflect flood risk in a warming climate.

There may be few places affected more by the new risk rating system than the Florida Keys, where the average elevation on the chain of islands off Florida’s peninsula is just over three feet above sea level. Almost all homeowners are required to carry flood insurance if they have a mortgage.

On Big Pine Key, after years of looking for a house she could afford, Amy Tripp and her husband were finally able to buy a home recently. “It was damaged in [Hurricane] Irma,” Tripp says. “It was totally gutted and has a new roof.”

The high cost of housing has long been a major problem in the Florida Keys, and the couple purchased the home through the non-profit Habitat for Humanity.

Amy Tripp’s home sits on a platform to avoiding flooding damage, but its flood insurance rate will still go up.

Saul Martinez for NPR

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Saul Martinez for NPR

Tripp is a graphic artist and web designer. Her husband installs fire sprinkler systems. It’s a modest house, and already elevated 10 feet above ground level to prevent flood damage. But before they finalized the sale, they had an unwelcome surprise: FEMA’s new flood rating system would raise their premiums by nearly 15 times, making the home suddenly unaffordable.

“It was going to go to $5,000 [dollars a year] if we didn’t close before October 1,” Tripp says. “And there were, I think, seven other families that were in the same position.”

They scrambled to close the sale early and avoid that spike. Even so, their annual premium will rise substantially each year going forward.

Throughout the Keys, FEMA’s new flood rates have dramatically increased the cost of owning a home. It’s also left homeowners, realtors and insurance agents like Rebecca Horan confused.

“Honestly,” she says, “I can’t see any rhyme or reason to see where they’re coming up with the premiums.”

Insurance agent Rebecca Horan in Big Pine Key, Florida, finds the new flood risk rating system confusing.

Saul Martinez for NPR

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The new rates are based on risk from multiple sources of flooding

FEMA’s new risk rating system depends on software that delivers sometimes surprising results. Horan says her house is nearby and similar in size and construction, but with a flood insurance estimate much lower than Tripp’s quote. “If somebody were to purchase it today, the premium would be $1700,” she says.

David Maurstad, the person in charge of FEMA’s National Flood Insurance Program, says in the past a homeowner’s rate was mostly based on two factors: where they were located in a flood zone, and their home’s elevation. But the warming climate is making rain and flood events more intense and frequent, so the new system takes into account “multiple flooding sources.”

“If you’re living in an area where you have hurricane risk, and riverine risk and now rainfall risk, yes,” Maurstad says, “your risk is now greater than… under the old methodology.”

Laura Lightbody of The Pew Charitable Trusts considers this a major improvement. The old risk rating system “was not designed for the flooding that we know today,” she says, “the sea level rise that so many Floridians experience.” The Florida Keys is a high-risk area, she says, and flood premiums there should reflect that.

With the growing number of extreme weather disasters, the federal flood insurance program is also some $20 billion in debt. Congress has pushed for years to modernize it and bring it back to solvency.

Amy Tripp’s kitchen is renovated. Her house was damaged by Hurricane Irma.

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Some fear middle-income workers will be priced out of homeownership

In Monroe County — the Florida Keys — FEMA says more than 90 percent of homeowners will see their annual flood insurance premiums go up, sometimes by thousands of dollars a year. It would be higher but Congress has capped annual increases for each homeowner at 18%.

Still, people buying new homes may now face bills 10 times higher than before.

Lisa Tennyson, the county’s legislative affairs director, says it may price homes out of reach for middle income workers, including “teachers, nurses, firefighters, government workers, utility workers. They own small businesses. These are your average people.”

Tennyson acknowledges that the indebted flood insurance program needs to be updated. But she thinks the agency “is undercounting what the on the ground impacts actually will be.”

A construction worker at Amy Tripp’s new home, which still needs a lot of work.

Saul Martinez for NPR

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FEMA’s David Maurstad hopes Congress will eventually agree to add means testing to the program to keep rates affordable for middle-class homeowners.

When the flood insurance program was last updated, nearly a decade ago, rising rates sparked an outcry and Congress stepped in with changes to soften the impact. That may happen again. A bipartisan group of Senators is calling the new risk rating system “an actuarial disaster” and is working on proposals to reform it.