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Federal council proposes major FEMA changes that could raise flood insurance costs

A federally appointed council is recommending major changes to flood insurance in America, including shifting more policies from FEMA's National Flood Insurance Program into the private market

Wally Lurz, WPTV

A federal council recommends shifting flood insurance to private markets and cutting FEMA staff. Experts warn of higher premiums and more claim denials.<br/>

By: Kate Hussey

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DELRAY BEACH, Fla. — A federally appointed council tasked with reevaluating FEMA is recommending major changes to flood insurance in America — and critics warn the proposals could lead to higher premiums, more claim denials and delays for millions of policyholders.

The FEMA review council's report proposes shifting more disaster costs to state and local governments, reducing FEMA's workforce, and moving flood insurance policies from federal oversight into the private market. Critics warn these changes could leave millions of Americans struggling with higher costs or potentially uninsured.

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FEMA changes could raise flood insurance costs

Palm Beach County Residents Already Feeling the Pinch

Bob Sparks, who has lived in Delray Beach for about 15 years, said his flood insurance premiums have already "roughly doubled in the last three, four, five years."

His rates jumped 20% this past year alone.

"I feel it's not only likely — but almost certainly the case" that further increases are coming, Sparks said.

The proposed changes come as FEMA data shows the National Flood Insurance Program paid out more than $22 million in flood claims across Florida last year, including $6.5 million specifically in Palm Beach County.

Insurance Attorney Warns of 'Extremely Negative Effects'

Aaron Bass, an insurance attorney, said the proposed changes would create a cascade of problems for policyholders and communities.

"I think it's going to have extremely negative effects on not just policy holders, but communities in general," Bass said.

Bass explained that the National Flood Insurance Program historically underwrote up to 95% of residential flood policies in the United States as of 2018, providing stability in a market private insurers have largely avoided.

Private Market Concerns and Workforce Cuts

The council's recommendation to move more policies into the private market raises questions about pricing, according to Bass. Private insurers might "charge astronomical rates, astronomical premiums, just leading people to stick with FEMA policies," he said.

Simultaneously cutting FEMA's workforce would compound the problem, Bass warned, comparing it to "Publix deciding to close half of its checkout stands on the Wednesday before Thanksgiving."

"If FEMA is going to have less people adjusting those claims, we're going to see delays in the system, we're going to see probably more underpayments, more denials of claims," Bass said. "This is going to have a very bad effect that snowballs throughout local economies."

Why This Matters Now

With climate change increasing flood risks and Florida experiencing more frequent severe weather events, flood insurance accessibility has become critical for coastal communities.

A Wharton School of Pennsylvania University report found 1.7 million Floridians held NFIP policies as of 2018, making any changes to the program particularly significant for the state's economy and housing market.

Bass warned that uninsured residents whose homes are destroyed could be forced to relocate, potentially creating "ghost towns" with severe economic ramifications.

Public Input Opportunity

The council's recommendations are not final. Federal officials have opened a public comment period through June 8, allowing residents to weigh in before any decisions are made.

Sparks, despite facing higher costs, said he understands the need for adequate coverage.

"No one enjoys paying more but you need insurance," Sparks said. "I'm not happy to pay more but I understand that if I choose to live on or near water, I need to pay more in insurance."

How to Submit Comments

You can submit a public comment through this portal here or by emailing FEMAreviewcouncil@hq.dhs.gov.

You must include Docket No. DHS-2025-0712 in the subject line of the message.

More information is available on the DHS website here.

This story was reported on-air by a journalist and has been converted to this platform with the assistance of AI. Our editorial team verifies all reporting on all platforms for fairness and accuracy.

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