The Federal Emergency Management Agency (FEMA) has agreed to revise flood maps in New York City after an independent analysis – another sign that technology around flood risk is improving.
In a joint statement released Oct. 17, FEMA and New York City Mayor Bill de Blasio said independent analysis used in an appeal of flood hazard maps for the city would be taken into consideration to draw new ones.
It’s a win for many New York City residents who were facing increased insurance costs that might have been unjustified according to the risk. Updated map zones released by FEMA in January of 2015 included 35,000 new homes and buildings in the highest-risk areas, raising concerns about their affordability. Any home or building in the highest-risk areas with a federally-backed mortgage is required by law to have flood insurance, which might cost thousands of dollars each year.
FEMA and the city also have agreed to work together to create a new methodology for predicting flood risk in the future and a map product. The redrawn maps will better reflect not only the current flood risk, but also future risk due to climate change, the statement said.
Partnerships like the one between the federal agency and the city might become more common as technology improves.
New flood modeling and improved computing power are sparking interest in flood insurance and likely opening doors for better and more available third-party analysis and collaborations.
Until recently, inability to comfortably measure flood risk, and the high price of premiums to make the product viable, deterred insurance companies from selling flood insurance. Nearly all flood insurance policies are written by FEMA’s National Flood Insurance Program (NFIP) and only a small number of carriers offer supplemental flood insurance policies to FEMA’s.
That started changing after storms resulting in major losses across several states, such as Louisiana and New Jersey, when the NFIP begin raising rates. Once the NFIP rates started going up, the possibility of a private flood insurance market seemed closer to viable than it had in about 50 years.
As climates change and costs through the NFIP likely continue to rise in the future, a private flood insurance market could develop.
And costs of private flood insurance will undoubtedly be high, but better technology and scrutiny of the federal flood maps from cities should keep premiums in check.
The statement by de Blasio and FEMA echoed that in saying the collaboration would “protect the affordability of flood insurance, which will continue to be priced against the revised FIRMs depicting current flood risk.”
This story originally appeared on ValuePenguin.