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In Texas and Florida, Nearly 90% of Flood-Insurance Policyholders Set to See Premiums Rise Due to FEMA Overhaul

Redfin reports the two Sun Belt states—which have gained more residents than any other state during the pandemic—are getting hit hardest by FEMA’s price hikes

(NASDAQ: RDFN) — Almost 90% of FEMA policyholders in Texas, Florida and Mississippi are experiencing flood insurance price increases—a higher portion than any other state and above the national average of 81%, according to a new report from Redfin (, the technology-powered real estate brokerage.

Nearly 3 million owners of single-family homes in the U.S. are seeing their flood-insurance premiums rise as a result of FEMA overhauling the way it measures risk, with the changes starting to take effect this month.

The premium increases started going into effect for existing policyholders on April 1, 2022, upon policy renewal. New policyholders have been subject to the overhauled pricing methodology since Oct. 1, 2021. Policyholders experiencing premium decreases also began seeing changes take effect in October 2021.

The cost increases are hitting flood-prone Texas and Florida at a time when both states are seeing their populations swell due to pandemic-driven migration. Texas and Florida—the two most populous states behind California—have soared in popularity as remote work and surging home prices have prompted Americans to seek out more affordable places.

Nationwide, over three-quarters (81%) of single-family home policyholders are set to see their flood-insurance premiums rise, starting April 1. The remaining 19% are seeing decreases. Of the policyholders experiencing increases, most (88%) are seeing annual premiums rise by up to $120, while 9% are facing increases of $120 to $240 and 4% are seeing jumps of $240 or more.

While these jumps may seem small, that’s partly because most increases are capped at 18% per year by law. Many policyholders will see their premiums rise further in the coming years, until their “full risk rate” is reached. That means some will face annual premium increases for the next decade. FEMA estimates that 50% of policies will be at their full risk rate after five years and 90% will be after 10 years.

“Most policyholders probably won’t feel the burn of FEMA’s price hikes in year one, but by year five or 10, the elevated cost of flood insurance could impact where Americans decide to buy and build homes,” said Redfin Senior Economist Sheharyar Bokhari. “Some people may choose not to renew their flood insurance policies despite increasing flood risk due to climate change, especially as inflation drives prices up elsewhere in the economy as well. Others may just move to less risky places where flood insurance isn’t required.”

Texas, Florida Have Highest Share of Policyholders Facing Price Increases

There are six states where more than 81% (the national share) of policyholders are seeing increases—all of which face substantial flood risk. In Texas, 89% of policyholders are seeing premiums rise—a higher share than any other state. Next comes Florida (88%), Mississippi (87%), Alabama (85%), West Virginia (84%) and Louisiana (83%).

In four of those six states—Texas, Louisiana, Mississippi and Florida—homeowners have been paying less for flood-insurance than the typical U.S. policyholder ($645). The typical policyholder in Texas paid $504 as of May 2020—the lowest of any state. The average premiums in Louisiana, Mississippi and Florida were $564, $566 and $615, respectively—the sixth-, eighth- and eleventh-lowest in the country.

All of the states mentioned above are expected to grapple with increased flood risk in the coming years. As of 2020, 1 in 4 properties in West Virginia and 1 in 5 properties in Louisiana and Florida faced substantial flood risk—more than any other states, according to First Street Foundation. In Texas and Alabama, about 1 in 10 properties faced substantial risk—roughly in line with the national average. That said, Texas is home to some of the most flood-endangered cities in the nation. Houston has 75,000 properties with substantial risk, the fourth-most in the country.

Hispanic Neighborhoods Most Likely to See Premiums Rise

Majority-Hispanic neighborhoods are more likely to see their flood-insurance premiums rise than any other major ethnic or racial neighborhood group, with 84% of policyholders facing increases. That’s likely because Texas and Florida—the states hit hardest by FEMA’s overhaul—have the largest Hispanic populations behind California.

Neighborhoods that are majority American Indian and Alaskan Native are the least likely to see premiums climb, with 67% of policyholders facing increases. Next comes neighborhoods that are majority Native Hawaiian and Other Pacific Islander, at 69%.

All other groups were roughly in line with the national average, with about 80% of policyholders facing increases.

Studies have shown that neighborhoods of color are often more vulnerable to climate change to begin with. There are $107 billion worth of homes at high risk of flooding in formerly redlined U.S. areas, compared with $85 billion in non-redlined areas, a 2021 Redfin analysis found. Today, a majority of households in neighborhoods once designated undesirable for mortgage lending under redlining are nonwhite.

Neighborhoods With Higher Home Prices Most Likely to Experience Premium Increases

In general, areas with higher home prices are seeing a larger share of policyholders face premium increases. When FEMA announced its new methodology, it said one of its goals was to “equitably distribute premiums across all policyholders based on the value of their home and the unique flood risk of their property.” The agency said that many policyholders with lower-value homes have been paying more than they should and policyholders with higher-value homes have been paying less than they should.

Interestingly, though, places with the highest earners are seeing a relatively small share of policyholders face price hikes. In neighborhoods where the median household income is $200,000 or more, 76% of policyholders are seeing premiums rise—below the national average. That’s roughly the same share as neighborhoods where the median income is under $20,000.

To view the full report, including a state-by-state breakdown, other charts and methodology, please visit:

About Redfin

Redfin ( is a technology-powered real estate company. We help people find a place to live with brokerage, instant home-buying (iBuying), rentals, lending, title insurance, and renovations services. We sell homes for more money and charge half the fee. We also run the country's #1 real-estate brokerage site. Our home-buying customers see homes first with on-demand tours, and our lending and title services help them close quickly. Customers selling a home can take an instant cash offer from Redfin or have our renovations crew fix up their home to sell for top dollar. Our rentals business empowers millions nationwide to find apartments and houses for rent. Since launching in 2006, we've saved customers more than $1 billion in commissions. We serve more than 100 markets across the U.S. and Canada and employ over 6,000 people.

For more information or to contact a local Redfin real estate agent, visit To learn about housing market trends and download data, visit the Redfin Data Center. To be added to Redfin's press release distribution list, email To view Redfin's press center, click here.


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