Wind, flood risk could spike Massachusetts insurance rates
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Hundreds of thousands of properties in the Boston metro area could face higher insurance premiums or policy non-renewals this year due to the risk of high winds, and/or flooding, according to a new analysis.
Driving the news: The higher premiums are expected to affect more than 26% of Boston metro area properties, especially along the coast, per climate data nonprofit First Street Foundation.
- 20% of Boston metro area homes could face an insurance rate increase or non-renewal because of wind, but flooding is also a concern.
What's happening: Insurers are changing how they factor climate and extreme weather risks into premiums. Others are suspending coverage altogether.
- The changes come months after FEMA updated its flood insurance pricing model for the first time since the 1970s, leading to higher premiums that are more reflective of today's flooding risks, says Jeremy Porter, First Street's head of climate implications research.
- Nationally, 8 million households are in FEMA flood zones, but only 4.7 million have active flood insurance policies.
Zoom in: More than 400,000 Massachusetts residents live in a flood zone, according to the Massachusetts Department of Public Health's Bureau of Climate and Environmental Health.
- That number is likely to increase as more portions of the state experience more heavy rain and other extreme weather events.
Threat level: In Massachusetts, there are more than 114,000 properties that have a 100-year flood risk, according to First Street, but don't appear in FEMA's flood zone and likely don't have flood insurance, Porter tells Axios.
- He says the discrepancy exists in part because FEMA does not account for the effects of heavy rain or overflowing small waterways, a common cause of flooding in the Northeast.
The big picture: Millions of properties nationwide could see higher premiums because of these climate- and weather-related risks, per estimates from First Street.
- Nearly 24 million U.S. properties may face higher premiums because of the risk of potential wind damage, about 12 million because of the risk of flooding, and about 4.4 million due to wildfire risk.