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After spiking premiums, nonrenewals and complaints about unpaid claims, more than 115,000 property owners in southwest Florida are now facing a new slap in the face after 2022’s Hurricane Ian: 25% higher flood insurance rates because local officials reportedly allowed subpar rebuilding for flood-damaged homes.

Governments in Lee County, Florida, which took the brunt of Ian’s storm surge in September 2022, said in a news release last week that the action from the Federal Emergency Management Agency is a “devastating blow” that came with no warning.

“Without any prior notice, FEMA verbally informed Lee County and some of its municipalities late Thursday that it was altering discounts on National Flood Insurance Program (NFIP) premiums that allow residents to save up to 25%, delivering a blow to the community as it continues to recover from the devastation of Hurricane Ian,” reads the statement from Lee County officials.

FEMA has long allowed the flood insurance premium discounts for communities that enforce the agency’s rebuilding requirements and take other measures to reduce flood losses. These include requiring rebuilding – and in many cases elevating – homes that were more than 50% damaged in a flood event.

But the federal agency said last week that the county and several municipalities had loosened the rules after the storm, allowing many policyholders to stay below the 50% mark and avoid a total rebuild and elevation, The Miami Herald, the Fort Myers News-Press and other Florida news outlets reported.

The move means that the cities and the county will lose the NFIP’s community-wide discounts on flood insurance. Some communities could be booted out of the NFIP altogether, a FEMA official said in a letter, the Herald reported.

Nobody wanted to reach this point, but the federal agency had little choice, and had sent local officials multiple letters requesting correct information on rebuilt properties, Robert Samaan, a regional administrator for FEMA, told the Herald.

FEMA inspectors said they found problems soon after Hurricane Ian slammed through the area in 2022, including much unpermitted rebuilds and a lack of documentation.

Local officials called the move “punitive.”

“Ian was the third costliest hurricane to hit the United States, and many of our residents are still reeling financially from its impacts,” Lee County Commission Chairman Mike Greenwell said in the press release.

“Make no mistake – FEMA is the villain in this nightmare,” Cape Coral Mayor John Gunter said in the statement.

The local leaders said they had undertaken many efforts in recent years to comply with the discount system. But FEMA contends the most important measures were not followed.

The average flood premium will rise by about $300 a year, starting Oct. 1.

Ironically, some critics of the NFIP have warned for years that the program had done little to enforce its Community Rating System parameters, allowing communities nationwide to claim discounts even when homes were not rebuilt to newer code requirements. It’s unclear if the Lee County action marks a new approach by FEMA leadership.

The idea behind the CRS was to encourage communities to keep more buildings out of flood zones and take other steps to prevent flood damage, thus reducing losses to NFIP. Some jurisdictions that gain the highest rating can see discounts as much as 40%.

The CRS is flawed, though, because it undercuts FEMA’s newly established Risk Rating 2.0, which aims to base flood insurance rates more on the risk of individual properties, not area-wide and outdated flood maps, Craig Poulton, head of Poulton Associates, a private company that writes flood and catastrophe insurance, said last year.

Southwest Florida communities may have a chance to rejoin the CRS discount program – but not until 2026.

Many more properties, including hundreds of thousands of homes across Florida and other parts of the Southeast, will be required to purchase flood insurance after July 31, due to revisions in federal flood maps.

For some of the most exposed and populous parts of the region, in south Florida, the changes means about 138,800 more structures in Miami-Dade, Palm Beach and Broward counties are now considered to be in the special flood hazard area, a significant increase from previous flood maps, according to the Federal Emergency Management Agency. For properties with mortgages, most owners will be required to buy flood coverage, bringing opportunity to insurance agents and private flood insurers, but more costs for insureds.

“The maps for some parts of Florida have not been updated in 20 years,” said Trevor Burgess, president and CEO of St. Petersburg-based Neptune Flood, one of the largest private flood insurance providers in the country.

Neptune now writes more than 191,000 policies, and Burgess expects that number to grow with the Federal Emergency Management Agency’s flood map revisions.

“The water levels are much higher now, the population has grown, and there have been a lot of changes to the landscape,” Burgess said.

The map revisions put about 252,015 structures in Miami-Dade County into the special hazard area, an increase of 45,420 structures from previous maps, FEMA data show. In Palm Beach County, some 34,154 properties are now in the flood zone, an increase of 5,800.

In Broward County, home of Fort Lauderdale, almost 89,000 parcels that were previously in a low-risk area are now in a higher-risk flood zone, the South Florida Sun Sentinel reported.

An agency official did not provide an estimate of the number of properties nationwide or across the Southeast, but people familiar with the maps said many parts of the region will be affected.

The FEMA map revisions came out this month, just as a tropical disturbance dumped as much as 20 inches of rain on parts of Miami-Dade and Broward counties. The flooding is expected to trigger thousands of claims on cars, homes and businesses, with insured losses in the hundreds of millions of dollars, Aon reported last week.

The changes also come at a time when many vulnerable residents and businesses in parts of the Southeastern United States have backed away from flood insurance. In Texas, the number of National Flood Insurance Program policies has dropped by 6% in the last 12 months, according to Neptune, which analyzed the NFIP data. Louisiana, which has 440,000 flood policies, also has seen the number of policies shrink by 6% in the last year.

Burgess pointed out that while FEMA has revised its maps, it’s partly up to communities to enforce the rules and disallow rebuilding in flood hazard areas. Many local jurisdictions have failed to do that.

In Lee County, Florida, where Hurricane Ian brought heavy storm surge and flooding in 2022, FEMA this spring stripped local governments of community-wide flood insurance discounts after the federal agency determined that many structures were allowed to rebuild without elevating or taking other flood-damage prevention measures. Local officials are continuing to work with FEMA on lightening the penalties.