Flood insurance calculator: the total of your next five bills

What the calculator does

Many policies written before FEMA's current pricing method still pay less than the price the method computes for their building. The law closes that gap in steps: the chargeable premium of a main home may rise by at most 18 % a year, and the premium of a non-primary residence, a business property or a severe repetitive loss property rises by 25 % a year until it reaches its full level (42 U.S.C. 4015(e), 4014(a)(2)). The calculator replays that rule five times.

It works on the whole bill, in four moves. First it takes out the charges that do not follow the premium: the Federal Policy Fee of $47 and the HFIAA surcharge of $25 for a main home or $250 for any other home. Then it raises what remains by the cap. When the next step would pass the full-risk level, it stops there. Last, it puts the fixed charges back and prints each renewal and the five-year sum. If the full-risk price is below today's bill, the calculator applies it at the next renewal.

What to enter, and where to find it

The first field is what you pay today for a year, all lines included: premium, Reserve Fund Assessment, HFIAA surcharge and Federal Policy Fee, plus a probation surcharge in the rare community that carries one. The total is at the bottom of the declarations page, or on the renewal notice.

The second field needs one more step. FEMA requires every declarations page to show a line called Full-Risk Premium, "always shown", described in the Flood Insurance Manual as the premium "excluding fees, surcharges, assessments, and applicable discounts". To compare it with your total, add the Reserve Fund Assessment, 18 % of that premium once no discount is left, and the two fixed charges. Done on the national median full-risk premium of $1,013, the sum is about $1,267. The median full-risk bill of $1,305 used as the default is a little different, because the median of a total is not the total of the medians.

No declarations page at hand? The ZIP code lookup shows the median bill and the median full-risk bill of the houses insured in your ZIP code or county, a fair stand-in until you have your own figures.

Four worked examples

The first row is the typical main home. Its capped part needs 2 renewals to close the gap, after which the bill sits at $1,305 until FEMA changes its rates. Over five years it pays $42 less than five bills at the full-risk price would cost, because the early years are discounted.

The second row keeps the same two totals but treats the house as a second home. The yearly step is larger, so the gap closes in 2 renewals; the five-year total is $6,497. In practice the comparison is unfair to the second home, whose real full-risk bill also carries the $250 surcharge: enter both totals as they appear on its own declarations page.

The third row shows a coastal case. A V zone house at the median has the widest gap of the three zone types and needs 3 renewals, so its bill in year five, $2,619, is far above today's. The last row is the opposite: in X, B and C zones the median bill is already close to its full-risk level and the increases are nearly over.

What the five-year total leaves out

The projection holds the full-risk price still. In reality FEMA reprices the program from time to time, so the target itself can move up or down. The cap also does not shield every change. The statute lets the premium rise faster when the owner raises the coverage or lowers the deductible, when the community loses its rating discount, or when the policy was misrated. A lapse of 30 days or more after the expiration date can cost the discount altogether and bring the full-risk premium at once. And a new owner keeps the discounted premium only through the routes set out in the manual, with the cap rebuilt on the new owner's own information.

Someone weighing a private quote can test it against the federal path. The private insurer has no legal cap, so the yearly increase below is your own assumption.

The rate increase guide explains why the bills rise, and the private flood insurance guide what a private policy must contain to satisfy a lender.