Wealthier Communities Pay Less for Flood Insurance

Friday June 05, 2015

•  CRS •  environmental policy •  environmental studies •  FEMA •  flood insurance •  flood studies •  NFIP • 

A new UMass study1 finds that rich communities pay less for flood insurance. Well, of course they do. There are two simple reasons for that.

The first is historical. Wealthier communities generally tend to stay that way. Looking backwards, this means they also have been for some time. If someone had means, they would have moved to where it was safe early and built those communities there. Those without means were stuck with less desirable land, including land at greater environmental risk. Along the coast, this means flooding.

What’s more, wealthier communities can pay to reduce insurance rates. FEMA sponsors the Community Rating System (CRS), a 10-point scale that measures the steps a community has taken to mitigate flood damage. More points is a greater discount on all policies within the community. Mitigate costs money and those with excess capital have the ability to pay for more resilience, thereby reducing flood insurance costs.

Image by Don Becker / U.S. Geological Survey / Flickr.

  1. The original study couldn’t be found in less than 30 seconds, a real problem.