FEMA is missing a self-imposed deadline to modernize the way it calculates risk when issuing flood insurance policies, another setback for the financially troubled program.
The Federal Emergency Management Agency said it won’t be rolling out its new risk rating system on Oct. 1 as originally planned, and now expects to introduce the new system a year later in 2021.
“Additional time is required to conduct a comprehensive analysis of the proposed rating structure,” the agency said in a Nov. 7 statement.
A FEMA spokeswoman declined to answer questions about why the system is delayed and what impact this could have on the federal insurance program.
The National Flood Insurance Program has been running at a deficit since Hurricane Katrina in 2005, as the nation faces stronger and more frequent storms.
FEMA’s new system, known as Risk Rating 2.0, would introduce tools such as laser-based elevation maps and historical flood claims to the agency’s process of setting premiums, which hasn’t changed since the 1970s.
The agency’s goal is to give homeowners a more accurate sense of their flood risks, and to bring premiums more in line with the latest actuarial science.
Lawmakers from coastal states, both Democrats and Republicans, have been wary of FEMA’s project.
People “are understandably concerned about skyrocketing premiums that could result from flood insurance rules being changed in the middle of the game,” Sen. Bob Menendez (D-N.J.) said in a statement on Nov. 7.
The flood insurance program was originally intended to cover its own costs through premiums, but hasn’t done so in years. Claims now outstrip premiums by an average of $1.4 billion per year, according to data from the Congressional Budget Office.