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Take-Up Rates for Flood Insurance in the High-Risk Areas of New York City Are Moderate

• Approximately 3.6 percent of New York City structures are in the high-risk areas defined by the 2007 flood map, and most of the structures (72 percent) are homes for one to four families. Approximately 55 percent of the one- to four-family homes in the high-risk areas had federal flood insurance on the eve of Hurricane Sandy; approximately three-quarters of one- to four-family homes in the high-risk areas on the 2007 map are subject to the mandatory purchase requirement. Of these, about two-thirds have flood coverage. Among homeowners not required to buy coverage, the take-up rate is only approximately 20 percent.

Hurricane Sandy Revealed Gaps in the Flood Insurance System

• The biggest gaps were limited basement coverage, lack of coverage for additional living expenses incurred because of flooding, lack of coverage for earth movement that results from flooding, lack of coverage for business interruption or business expenses, inadequate coverage for mixed-use buildings, and varying coverage for street and area closures imposed by civil authorities.

Changes in the National Flood Insurance Program Will Affect New Yorkers

• The Federal Emergency Management Agency issued preliminary work maps for the new flood insurance rate map in June 2013, and the new map is expected to go into effect in 2015. Approximately 32,000 structures that were outside the 2007 high-risk areas and not built to floodplain standards will now be in New York City's high-risk flood zones.
• Flood insurance premiums will increase. The increase could well rise $5,000 to $10,000 for structures that are outside the high-risk areas of the 2007 map but in the high-risk areas of the updated map that is projected to take effect in 2015. These increases could reduce property values and pose hardships for low-income households.