Philadelphians will see 15% discount on flood insurance starting in April

This story is part of the WHYY News Climate Desk, bringing you news and solutions for our changing region.

From the Poconos to the Jersey Shore to the mouth of the Delaware Bay, what do you want to know about climate change? What would you like us to cover? Get in touch.

Philadelphians who pay for federal flood insurance will get a 15% discount on their premiums starting this spring.

The city announced Wednesday it will join the Federal Emergency Management Agency’s Community Rating System, a program that rewards municipalities that take steps to reduce flood risk with discounts on National Flood Insurance Program premiums for residents and businesses, in April.

Flood risk is rising in the Philadelphia region. It can total cars, destroy appliances and cause extensive damage to homes. After the remnants of Hurricane Ida flooded homes and businesses in 2021, more than 43,200 Philadelphia households without adequate flood insurance were forced to apply for federal aid. Typical homeowners insurance does not include flood coverage. 

Flood insurance helps insulate households from these financial losses, but it can be expensive, costing hundreds of dollars a year or more. In 2024, about 3,600 properties in Philadelphia had flood insurance, according to FEMA.

“We encourage folks to get flood insurance to protect themselves,” said Joseph Sullivan, who works on flood resilience in the city’s Office of Sustainability. “And so being able to offer any kind of discount on that will help make flood insurance more accessible and affordable.”

Nelson Haakenson, a small landlord, partially retired painting contractor and father of three, did not have flood insurance when the remnants of Hurricane Ida flooded his basement in East Falls, causing thousands of dollars of damage. Since then, he’s held off purchasing flood insurance, even though he wants to have it.

“Between the auto, health and property insurance that I already have, I’m just right on the edge of being able to afford that, so adding in flood insurance is a problem,” he said. “The last time I did price it, it seemed a little bit more than I could handle.”

A 15% premium reduction is “substantial,” Haakenson said. He plans to research what a National Flood Insurance Program policy would cost after this discount and reconsider whether to sign up.

“Whether it’ll be enough, I don’t know,” he said.

Philadelphia was approved to join FEMA’s discount program in August after exploring it for more than a decade. The city’s acceptance into the program makes it the fourth most-populous city in the U.S. to participate.

More than two dozen municipalities in Pennsylvania already participate in the program, as do numerous towns along the Jersey Shore and several in Delaware.

The discount will save Philadelphia businesses and residents a combined total of about $424,000 on flood insurance, according to the city.

How FEMA’s Community Rating System works

The more flood-safe policies and practices a municipality puts in place, the deeper the discounts for residents under FEMA’s Community Rating System. Discounts can range from 5% to 45%.

Municipalities earn points for actions such as buying out floodprone homes, protecting open space in the floodplain from development or requiring the first floors of new buildings in flood zones to be raised above minimum levels.

Philadelphia got credit for activities including its hazard mitigation plan, its community outreach and maintaining parkland around waterways, Sullivan said. Philadelphia will enter FEMA’s program at a Class 7, which corresponds to the 15% discount for policyholders in the city.

What the discounts will mean for Philadelphians

Philadelphia homeowners, renters and businesses with policies starting or renewing after April 1 should see the discount applied automatically, according to the city. If the discount does not automatically appear, Sullivan recommends contacting your insurance agent.

The discount should equate to roughly $130 off of the median annual premium of $870 for single-family homes, including rowhouses, as of 2024.

Eastwick resident Anita Barnes said she plans to sign up for a new flood insurance policy with more comprehensive coverage after April, to take advantage of the discount. Her current policy costs close to $2,000 per year, and does not cover the contents of her home, merely the building itself, she said. Barnes called the 15% reduction “significant,” but added that it likely won’t be enough to help some neighbors on fixed incomes afford flood insurance.

“They’re retired, some are on disability, and it’s really cost-prohibitive,” Barnes said.

“I’m glad to see some progress,” she added. “At least this is something that’s going to directly affect the homeowners. Rather than just some kind of study or … planning stage, this is actually something that’s months away from happening.”

Sullivan said the city is looking for ways to secure deeper discounts in the future. He said the city could earn more points for higher elevation standards for new construction or more community outreach promoting flood insurance. Fifteen departments worked together on the city’s application, and Sullivan declined to commit to specific actions, saying they’ll require “interagency collaboration and coordination.”

“We really see this as a starting point,” Sullivan said. “We really hope over the next years of our participation in the program that we’re able to improve our standing, while recognizing that for a really large city, it can be really challenging because of the amount of documentation and activities required.”

The city plans to hire a new staff member to manage the city’s continued participation in the program, Sullivan said.