The federal agency that insures millions of people against flood damage is overhauling a widely criticized program that rewards policyholders who live in communities with strong flood protection.
More than 3.5 million people and businesses are getting discounts of up to several hundred dollars a year on the premiums they pay the Federal Emergency Management Agency for flood insurance. Discounts apply to 70 percent of FEMA’s flood policies, but government auditors have said the discounts are being given for activities that don’t always reduce flood damage.
The discount program, which aims to encourage community flood protection, has faced criticism from states, floodplain managers and government analysts who said in July 2023 that the discounts “are not actuarially justified.”
FEMA announced the overhaul through a recent Federal Register notice that seeks public input on a series of possible changes including narrowing the discount program.
