Subsidized insurance will still be available for about 715,000 properties, mostly single-family homes, notes Ray Lehmann, a senior fellow at the R Street Institute, a libertarian think tank in Washington that supported the reforms. But once a home is sold, or more than half of it is rebuilt after experiencing flood damage, or when new homes are built in flood zones, the unsubsidized rates will kick in. Rates also would rise if new flood maps show an increased risk for an existing home once thought to be in a safe location.
The drivers for reform: a flood-insurance program that is nearly $30 billion in the red, taking in premiums of some $3.6 billion; continued development along US coastlines and in other flood-prone areas; and global warming's current and projected impact on rising sea levels and weather extremes.
"This is a very significant moment in our national Zeitgeist in terms of people starting to recognize that climate risks are affecting every part of our life, including our economic choices, where we live, where we do business," says Rachel Cleetus, a senior economist with the Union of Concerned Scientists' Climate and Energy Program.
The National Flood Insurance Program currently has 5.6 million policies on its books covering properties collectively worth more then $1.2 trillion, noted FEMA Administrator Craig Fugate, during a mid-September Senate hearing on implementation of the Biggert-Waters Flood Insurance Reform Act of 2012.
Of those 5.6 million policies, about 20 percent have been subsidized.
And while about 1.3 percent of the subsidized policies cover property that has experienced repeated bouts of flood damage, those properties have accounted for some 25 percent of the flood-insurance program's payouts since 1978, Dr. Cleetus says.