Have FEMA flood insurance? Your costs are likely to change.

The Federal Emergency Management Agency's historic recalculation of flood insurance premiums will go into effect Oct. 1, and approximately 5 million policyholders nationwide will see changes in the coming year.

FEMA's Risk Rating 2.0 has been hailed as positive in that flood insurance premiums will now accurately reflect the real cost of flooding. For years, the National Flood Insurance Program has subsidized flood insurance by calculating premiums based on flood zone maps, and not individual, present-day structure risk. Some homeowners have been paying far less than their fair share, while others have been paying much more. Risk Rating 2.0 is meant to correct that by assessing a building's actuarial flood risk.

But there's national concern that more than 3 million people will see their premiums increase as a result – and rightfully so based on the risk of flooding. Homeowners less likely to be able to weather an unexpected increase in their housing costs, like the middle class and low-income homeowners, could, in turn, be hurt by the policy change. More than 1.5 million will be lucky and see premium decreases.

"Conscious of the far-reaching economic impacts COVID-19 has had on the nation and existing policyholders," FEMA says, the agency is taking a phased approach to rolling out the new rates. New policies beginning Oct. 1 will be subject to the new methodology, and existing policyholders eligible for renewal will be able to take advantage of immediate decreases in their premiums. On April 1, 2022, all remaining policies renewed on that date or after will be subject to the new methodology.

In New England, tens of thousands of residential properties are considered to be at substantial risk of flooding – defined as having at least a 1% annual chance of flooding, or a "100-year flood" risk.

And the risks are only growing. More frequently, people in New England are seeing their streets or basements flooded by rainfall, because precipitation is dropping heavier within shorter periods due to climate change. Storm surge and sea-level rise threats are also rising, particularly in New England.

Risk Rating 2.0 will see FEMA incorporating factors like flood frequency, multiple flood types, distance to water and property characteristics to determine a structure's insurance premium. The agency has released numbers showing how policyholders in each state will be impacted by Risk Rating 2.0. Federal law requires that most rates not increase more than 18% per year.

There are approximately 124,200 National Flood Insurance Program policies in force in all six New England states.

How will flood insurance changes affect Massachusetts?

In Massachusetts, FEMA says 94% of current premiums will either decrease or increase by $20 or less per month.

Of those seeing increases, 3,712 policyholders will see an increase of $20 or more per month, and 32,200 policyholders will see $20 or less per month. Immediate decreases will occur for 22,599 policyholders.

How will flood insurance changes affect Rhode Island?

For policyholders in Rhode Island, FEMA says 97% of current premiums will either decrease or increase by $20 or less per month.

Of those seeing increases, 389 policyholders will see an increase of $20 or more per month, and 6,092 policyholders will see $20 or less per month. Immediate decreases will occur for 5,520 policyholders.

How will flood insurance changes affect New Hampshire?

In New Hampshire, FEMA says 93% of current policyholders' premiums will either decrease or increase by $20 or less per month.

Of those seeing increases, 3,712 policyholders will see an increase of $20 or more per month, and 4,557 policyholders will see $20 or less per month. Immediate decreases will occur for 2,675 policyholders.

How will flood insurance changes affect Maine?

In Maine, FEMA says 91% of current policyholders' premiums will either decrease or increase by $20 or less per month under Risk Rating 2.0.

Of those seeing increases, 689 policyholders will see an increase of $20 or more per month, and 4,452 policyholders will see $20 or less per month. Immediate decreases will occur for 2,606 policyholders.

How will flood insurance changes affect Vermont?

In Vermont, FEMA says 92% of current policyholders' premiums will either decrease or increase by $20 or less per month.

Of those seeing increases, 252 policyholders will see an increase of $20 or more per month, and 1,976 policyholders will see $20 or less per month. Immediate decreases will occur for 1,103 policyholders.

How will flood insurance changes affect Connecticut?

In Connecticut, FEMA says 91% of current policyholders' premiums will either decrease or increase by $20 or less per month

Of those seeing increases, 3,172 policyholders will see an increase of $20 or more per month, and 18,917 policyholders will see $20 or less per month. Immediate decreases will occur for 12,740 policyholders.

Legislators push back against Risk Rating 2.0

While FEMA says most flood insurance policyholders will see a difference of $20 or less per month, a group of legislators from New Jersey, Texas, Louisiana and a handful of other states recently penned a letter to House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy expressing concern over "potential double digit rate hikes."

"The additional burden of up to double digit rate hikes by FEMA for our constituents, especially those in low- and moderate-income communities is too much for them to bear," they wrote. "Massive rate changes should be subject to additional scrutiny and review by Members of Congress in a long-term reauthorization, not arbitrary FEMA deadlines."

Some states are expected to see larger rate hikes than others, due to their elevated flood risk and how homeowners there have historically been paying far less than that estimated risk.

The legislators requested a delay in Risk 2.0 implementation, but FEMA plans to move ahead with it for Oct. 1. Groups like The Pew Charitable Trusts have hailed the forward momentum.

"In a world with growing risks, this is a welcome — and timely — change," wrote Laura Lightbody, project director for flood-prepared communities, earlier this month. "Without Risk Rating 2.0, every NFIP policyholder would get a rate increase this year. Under the new, more equitable plan, nearly 1.2 million of the more than 5 million NFIP policyholders will see an immediate decrease in premiums. More than 215,000 policyholders will get at least a $1,000 break on their yearly premium. Of the single-family homeowners who will see costs rise, nearly 88% will face a modest increase of $10 or less per month."