VA Flood Insurance Costs Soar Due to Rising Risk and New FEMA Rules

Flood insurance costs are dramatically rising for Virginia residents and businesses. This increase is driven by FEMA’s new Risk Rating 2.0 system, implemented fully by April 2023. Critics contend the system has significantly increased policyholder premiums and does not sufficiently reward flood mitigation. The average annual flood insurance cost in Virginia is estimated to rise by 45 percent. Only three percent of Virginia homeowners currently hold flood insurance. Flood risk is also increasing across the state, with over 28 percent of homes potentially facing risk in the next 30 years, particularly in areas like Virginia Beach. Southwest Virginia recently experienced significant flooding damage from Hurricane Helene. A lawsuit challenging FEMA’s rating system, joined by Virginia’s Attorney General, was dismissed in November 2023. Local communities can participate in FEMA’s Community Rating System by implementing flood protection policies to potentially lower insurance costs. A 20 million dollar federal grant for a flood resilience project in Hampton is reportedly at risk of cancellation.