The Federal Emergency Management Agency refers to its new flood insurance pricing structure, known as Risk Rating 2.0, as "Equity in Action." The agency says that the revised rates, which went into effect Oct. 1, 2021, "leverage industry best practices and cutting-edge technology to enable FEMA to deliver rates that are actuarially sound, equitable, easier to understand and better reflect a property's flood risk." The new pricing structure is a departure from the U.S. government's longtime practice of using flood-zone maps to determine risk and instead takes into consideration several property-specific factors including elevation, the type of foundation and the structure's replacement cost. Why the pricing update? "FEMA's rates have been insufficient to cover the actual cost of flood claims," write Forbes Advisor editors Jason Metz and Amy Danise. "This has resulted in massive debt. As of August 2020, FEMA's debt was $20.5 billion, and that's after Congress canceled $16 billion in debt in October 2017, according to the U.S. Government Accountability Office." While some flood insurance policyholders will benefit from Risk Rating 2.0, the first pricing update from FEMA in more than four decades, others face notably higher rates, according to Forbes Advisor research. The slideshow above illustrates the five U.S. communities likely to see the highest flood insurance rate increases due to Risk Rating 2.0, based on FEMA data analyzed by Forbes Advisor. See also: |

• Risk Rating 2.0's implications for homeowners, new buyers
• The potential insurance-industry impact of Risk Rating 2.0
• Flood risk drivers: Rising sea levels, extreme weather & the moon