Flood insurance rates set to surge for many Florida homeowners as new FEMA calculations kick in

TAMPA, Fla. - If you pay flood insurance for your home, get ready for some sticker shock.  Changes to the way FEMA calculates premiums are set to take effect this Friday, and homeowners all across the Tampa Bay region could see significant rate hikes.

The vast majority of Floridians have their flood insurance policy through FEMA’s National Flood Insurance Program -- and big changes are about to be rolled out.

"We're seeing probably 90% to 95% of homes within the Tampa Bay region that are in flood zones see rate increases as a result of this," explained Jake Holehouse, President of HH Insurance Group.

This is the first major overhaul of this program since the 1970s.  Currently, NFIP premiums are calculated based on flood zones and elevation.

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The new system is called Risk Rating 2.0, and the goal is for rates to reflect the actual risk of each property, taking into account multiple factors like proximity to water, and drainage.

"For those homeowners, it's definitely something to be proactive on in terms of understanding the change and how it affects you, because, unfortunately, we were only given a 30-day window of being able to communicate this change," Holehouse said.

Come Friday, anyone purchasing a new NFIP policy will be charged with the new formula.  While anyone with an existing policy will start seeing changes on April 1.  And there will be some hefty hikes.

"We're seeing some of those go from $600 to $11,000 per year within the NFIP program," said Holehouse.

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Those increases are capped at 18% a year, so any huge spikes will be phased in.

Still, Holehouse says there are concerns.  FEMA has not released exactly how Risk Rating 2.0 is calculated, or provided all of the factors the formula uses.

"From what we can tell, the biggest rating factors are value of home," he said.  "We've seen examples where you move it from basically different values, and as the value goes up, the premium increases pretty significantly at the same time."

Meaning, a homeowner who spent money elevating their home could pay the same rates as a non-elevated home since it would be more expensive to rebuild, even though the risk of damage is lower.

"It basically just wiped out those rate credits to where somebody is not as financially incentivized to build up and become storm resilient," said Holehouse.

Over the last two weeks, local members of Congress have taken action to try to delay the rollout of Risk Rating 2.0 because of the burden homeowners could face.  Letters were sent to House leadership and FEMA urging action, and Tuesday, Senator Marco Rubio introduced a bill to push the changes back a year.