Flood insurance premiums on Long Island could double over next 10 years as sea levels rise
Long Islanders are beginning to see the tangible costs of climate change in the form of rising insurance costs.
In some communities, flood insurance premiums will double or triple as the federal government aims to more accurately capture the risk of damage from storms on Long Island.
Future buyers of properties near the water are contending with higher mortgage costs — because of a combination of near-record home prices and higher interest rates — as well as increases in homeowners and flood insurance premiums, said Aaron Stein, owner of Norton & Siegel, an insurance brokerage in Babylon.
“There's a triple whammy,” Stein said. ” … At what point is this going to start affecting the purchases of homes?”
So far, local real estate agents and insurance brokers said they had not seen a change in buyers’ behavior around purchasing coastal homes.
Meanwhile, state officials have sounded the alarm. Sea levels are expected to rise in the range of 13 to 25 inches by the 2050s, according to projections from the state Department of Environmental Conservation released last year. The DEC lists more intense storms, increased erosion and flooding in coastal communities among the consequences of climate change for Long Island.
Stein says for some Long Islanders, the effects of climate change feel far off.
“The biggest problem is that people are still in denial. The water when they went a month ago, it doesn't look any higher today,” Stein said.
It was only 12 years ago that Superstorm Sandy battered nearly 100,000 Long Island homes and caused $19 billion in damage and economic costs.
Irene Siconolfi, a real estate agent at Douglas Elliman, remembers walking in Massapequa with other agents in the aftermath. “Toothbrushes were floating down the streets,” she said. “It’s all been redone and everybody raised their homes and it’s like it never happened.”
More recently, Siconolfi worked with a West Islip homeowner who initially wanted to sell because of repeated flooding but started to get cold feet when a buyer came along.
“I’m going to relate this to a heart attack,” she recalled telling him. “When you first get one, you’re eating salads for three months and you’re very cautious, and then all of a sudden nobody cares.”
Jerry O’Neill, an associate broker at Signature Premier Properties in Amity Harbor, has been selling homes along the South Shore for more than 50 years. A waterfront homeowner himself, he has seen storms pummel the coast and flood neighborhoods without affecting property values.
Although it may motivate some owners to speed up the sale of their homes, he hasn’t seen a rush of sellers even after the biggest storms, such as Hurricane Gloria in 1985 and Sandy in 2012.
“We always expected after one of these storms it would negatively impact that portion of the market, the waterfront market, and it didn’t,” O’Neill said. “It didn’t after Gloria. It didn’t after Sandy.”
O'Neill recently sold a home on the water in Amityville to Doug Milstein, 42, who jumped at the chance to stay in the neighborhood where he grew up and fell in love with boating and going to surf at Gilgo Beach.
Milstein and his wife, Jackie, 37, had considered a move to Australia last year, living Down Under for four months to test it out, before ultimately deciding to stay in Milstein’s childhood home in Amityville, which he bought from his mother in 2015.
The couple considered an extensive renovation to the 1908 Victorian home on Amityville Creek before deciding they didn’t want to live through the construction with their 2-year-old daughter.
When a newly renovated house on the water hit the market last November, the Milsteins knew they needed to buy it, paying about $1.6 million.
“I wasn’t going to be able to move off the water,” Milstein said. “I struggled at the thought of living somewhere that wasn’t on the water because it became such a part of my life.”
In the new house, the couple is required to have flood insurance, paying $875 a year. That wasn’t the case with their previous home, which despite being on the water, had no flood insurance requirement and escaped Sandy without flooding.
The main floor of the new house, built in 2015, was lifted 9 feet off the ground to protect from floods. Milstein said he waded down the block in his surfing wet suit in waist-deep water to check how it fared in January’s major storms and was happy to see the water didn’t make it above the bulkhead.
While he worries what a devastating storm could do to his neighborhood, Milstein said he’s happy with his decision to stay on the water.
“Every individual needs to determine what risk tolerance they have,” he said. “The pros of living on the water outweigh the negatives and the safety and smoother ride that would come with living off it.”
The changes in flood insurance will have a greater effect on more cost-conscious buyers. Real estate agent Jeffrey Jimenez said a $150 monthly flood insurance bill can affect whether people qualify for a mortgage in areas that attract first-time homebuyers, such as Mastic Beach, where he often sells homes. The median price for houses there has been about $390,000 over the past year, according to OneKey MLS.
Often, buyers purchasing in a flood zone take on all of the risk of living in a low-lying area without any of the luxury amenities associated with waterfront properties, he said.
“Buyers will call me and tell me they don’t want to be in a flood zone,” Jimenez said. “It’s not because of price. It’s because they don’t want to deal with flooding. They’ve seen the videos. They don’t want to entertain dealing with those issues.”
In 2022, FEMA finalized a new way to calculate insurance prices called Risk Rating 2.0. The system bases prices on an individual home’s risk level instead of a more general estimate based on flood zones.
The goal was to create a fairer system, in which property owners pay based on their actual risk of flood damage. The result was higher premiums for Long Island.
“The ones that are getting hurt are ones that have claims, or repetitive-loss properties,” said David W. Clausen, CEO at Coastal Insurance Solutions in Rocky Point. “If you’ve had a few losses, those people will be in a tough spot as opposed to the same exact home next door.”
Under Risk Rating 2.0, the average cost of flood insurance for single-family homes on Long Island will nearly double to about $2,500 a year, according to a Newsday analysis of FEMA data. Long Islanders paid about $1,300 on average under the old system.
But homeowners won’t see that change all at once. Federal law prohibits the National Flood Insurance Program from increasing premiums more than 18% a year, so homeowners facing the steepest increases could see their costs increase by that amount annually for 5 to 10 years.
For a Long Islander paying the area’s average premium of $1,300 before Risk Rating 2.0 went into effect, it would take six years before they would pay the full-risk premium of $2,500.
Suffolk County policyholders will see larger increases on average than those in Nassau. The average Suffolk premium will increase 122% from 2022 until properties are paying the full value of their new rates.
The average flood insurance premium will double in 50 of the 163 Long Island communities that have more than five homeowners required to carry flood insurance.
Under the new pricing system, West Islip will have the highest flood insurance premiums on average, at $4,486 a year, among 674 homes in that community included in FEMA data as of December 2022. The average premium is nearly quadruple the average premium under the previous rating system.
Because of the 18% cap on annual increases, it won’t be until the 2030s that a West Islip home would pay its full risk rate, if it were hiked from around $1,200 to $4,500.
“Every home is generating its own rate,” Clausen said. “Insurance has been going up just like a lot of other things, so it’s a little bit masked.”
All 10 of the communities that will see the greatest percentage increases in premiums under Risk Rating 2.0 are in Suffolk County.
Among areas with at least 100 flood insurance policies, Brightwaters, Blue Point, Islip, Copiague and Babylon will see the greatest percentage increase in average flood insurance premiums, with the average price roughly tripling or quadrupling in those areas once properties' full risk is factored in.
Long Beach, Oceanside and Massapequa have the most federal flood policies among Long Island communities. Premiums in those areas are also among the highest on average on Long Island, but the average policy in those areas didn’t rise by as much under FEMA’s new flood policy.
The average cost will be about $2,582 in Long Beach, $2,503 in Oceanside and $3,286 in Massapequa, according to FEMA data.
Cory Knopf, an associate broker at Compass in Oceanside, estimated that about half the homes in the communities where she sells are required to have flood insurance.
In coastal neighborhoods, buyers who are already facing low inventory make their search harder by excluding homes that require flood insurance, she said. Knopf tells buyers looking in areas that require coverage to expect to pay about $1,500 to $2,000 a year for flood insurance for homes with a reasonable amount of risk based on their insurance premiums.
While FEMA's changes help, there is still a vast gap between homeowners' perception and their actual flood risk, said Jeremy Porter, head of climate implications at First Street in Brooklyn, a company that publishes research and data on climate risk.
Porter, a Babylon resident, said the knowledge gap has led homes at risk of damage from costly storms to be overvalued by buyers in states without flood risk disclosure because the risk of damage isn't properly factored into prices, according to an article he co-authored last year for the journal Nature Climate Change.
Florida and Massachusetts are among the states that lack disclosure requirements where the researchers said overvaluation was greatest. Property values are also higher in those states; West Virginia properties were among the most overvalued as a percentage of local home prices, according to the study.
A New York law requiring sellers to disclose more about their home's history and risk of flooding went into effect in March, and Porter said that could begin to affect home values in the coming years.
Research published by mortgage purchaser Fannie Mae in February found a 2019 flood disclosure law in Texas affected home prices. The change in Texas law required sellers within 500-year flood plains, or areas that would be covered in water during a flood with a 1-in-500 chance of happening in a given year, to disclose their home's risk to buyers. Previously, only sellers living within the narrower 100-year flood plain were required to disclose.
The authors found sale prices in the 500-year zones were 4.2% lower relative to properties with negligible flood risk, according to the analysis. The findings highlight how homes farther from the coast could still face threats from climate change.
The fast growth of home prices since the pandemic has masked some of that effect on Long Island. But homeowners at greater risk of flooding could see their home values appreciate at a slower pace than those with lower flood risk in the future, Porter said.
“As long as we have a strong market and housing prices are increasing, I think the impact is going to be kind of hidden,” Porter said. “You'll start to see the gap widen over time, but the people that are being hit don't really notice it because the property values are still going up.”
Keith Gropper, 63, and his wife, Lisa, 59, live in The Canals section of Long Beach on the north side of the barrier island. Gropper, a steamfitter who belongs to Local 638, said he remembers returning to his home the day after Sandy after flooding destroyed the main floor and boiler.
“It wasn't a violent storm. It was just massive amounts of water,” he said. “All I saw was there was a dirt line on the outside of the house where the water had come up.”
In all, the storm caused more than $200,000 in damage, forcing his family out of the house for about six months.
More recently, heavy storms have caused water to rise through sewer grates, pooling about 18 inches in the middle of the street and spilling onto neighbors’ lawns. Gropper’s home sits about 3 feet off the ground above a crawl space, but some of his neighbors’ homes are lower to the ground.
“When the street floods, I’ve got to yell at [cars] to not go fast because any waves go in their front door,” he said.
Gropper said he pays about $4,500 a year in flood insurance, which he estimated has increased by about $1,200 in the past few years. While it’s an unwanted expense, he said it doesn’t seem like much compared with the roughly $20,000 he pays in property taxes.
When he retires, Gropper said taxes and insurance on the home will take up about one-third of his income.
“My main concern is when I’m on a fixed income in the very near future that taxes and insurance — I won’t be able to stay in the house,” he said.
But with his adult children living nearby, Gropper has no plans to leave Long Beach.
“This is where my home is, and this is where I want to stay,” he said.
Long Islanders are beginning to see the tangible costs of climate change in the form of rising insurance costs.
In some communities, flood insurance premiums will double or triple as the federal government aims to more accurately capture the risk of damage from storms on Long Island.
Future buyers of properties near the water are contending with higher mortgage costs — because of a combination of near-record home prices and higher interest rates — as well as increases in homeowners and flood insurance premiums, said Aaron Stein, owner of Norton & Siegel, an insurance brokerage in Babylon.
“There's a triple whammy,” Stein said. ” … At what point is this going to start affecting the purchases of homes?”
WHAT TO KNOW
- Rising costs of flood insurance is one way Long Islanders are feeling the effects of climate change.
- Flood insurance premiums for single-family homes on Long Island are expected to nearly double over the next 5 to 10 years after the federal government recently changed the way it sets rates.
- Local real estate agents and insurance brokers say they haven't seen much change in buyers' choosing to live near the water.
So far, local real estate agents and insurance brokers said they had not seen a change in buyers’ behavior around purchasing coastal homes.
Meanwhile, state officials have sounded the alarm. Sea levels are expected to rise in the range of 13 to 25 inches by the 2050s, according to projections from the state Department of Environmental Conservation released last year. The DEC lists more intense storms, increased erosion and flooding in coastal communities among the consequences of climate change for Long Island.
Stein says for some Long Islanders, the effects of climate change feel far off.
“The biggest problem is that people are still in denial. The water when they went a month ago, it doesn't look any higher today,” Stein said.
See where flood insurance premium increases are steepest
Future cost of insurance reflects what policyholders will pay when they reach their full actuarial rate based on their homes risk. Federal law caps increases at 18% a year for most policyholders, so some may not pay that rate for several years.
Toggle the layers on the map below to view communities by average future flood insurance cost and by percentage change in insurance cost. Use the database to search for and compare communities.
'Like it never happened'
It was only 12 years ago that Superstorm Sandy battered nearly 100,000 Long Island homes and caused $19 billion in damage and economic costs.
Irene Siconolfi, a real estate agent at Douglas Elliman, remembers walking in Massapequa with other agents in the aftermath. “Toothbrushes were floating down the streets,” she said. “It’s all been redone and everybody raised their homes and it’s like it never happened.”
More recently, Siconolfi worked with a West Islip homeowner who initially wanted to sell because of repeated flooding but started to get cold feet when a buyer came along.
“I’m going to relate this to a heart attack,” she recalled telling him. “When you first get one, you’re eating salads for three months and you’re very cautious, and then all of a sudden nobody cares.”
Jerry O’Neill, an associate broker at Signature Premier Properties in Amity Harbor, has been selling homes along the South Shore for more than 50 years. A waterfront homeowner himself, he has seen storms pummel the coast and flood neighborhoods without affecting property values.
Although it may motivate some owners to speed up the sale of their homes, he hasn’t seen a rush of sellers even after the biggest storms, such as Hurricane Gloria in 1985 and Sandy in 2012.
“We always expected after one of these storms it would negatively impact that portion of the market, the waterfront market, and it didn’t,” O’Neill said. “It didn’t after Gloria. It didn’t after Sandy.”
O'Neill recently sold a home on the water in Amityville to Doug Milstein, 42, who jumped at the chance to stay in the neighborhood where he grew up and fell in love with boating and going to surf at Gilgo Beach.
Milstein and his wife, Jackie, 37, had considered a move to Australia last year, living Down Under for four months to test it out, before ultimately deciding to stay in Milstein’s childhood home in Amityville, which he bought from his mother in 2015.
The couple considered an extensive renovation to the 1908 Victorian home on Amityville Creek before deciding they didn’t want to live through the construction with their 2-year-old daughter.
When a newly renovated house on the water hit the market last November, the Milsteins knew they needed to buy it, paying about $1.6 million.
“I wasn’t going to be able to move off the water,” Milstein said. “I struggled at the thought of living somewhere that wasn’t on the water because it became such a part of my life.”
In the new house, the couple is required to have flood insurance, paying $875 a year. That wasn’t the case with their previous home, which despite being on the water, had no flood insurance requirement and escaped Sandy without flooding.
The main floor of the new house, built in 2015, was lifted 9 feet off the ground to protect from floods. Milstein said he waded down the block in his surfing wet suit in waist-deep water to check how it fared in January’s major storms and was happy to see the water didn’t make it above the bulkhead.
While he worries what a devastating storm could do to his neighborhood, Milstein said he’s happy with his decision to stay on the water.
“Every individual needs to determine what risk tolerance they have,” he said. “The pros of living on the water outweigh the negatives and the safety and smoother ride that would come with living off it.”
The changes in flood insurance will have a greater effect on more cost-conscious buyers. Real estate agent Jeffrey Jimenez said a $150 monthly flood insurance bill can affect whether people qualify for a mortgage in areas that attract first-time homebuyers, such as Mastic Beach, where he often sells homes. The median price for houses there has been about $390,000 over the past year, according to OneKey MLS.
Often, buyers purchasing in a flood zone take on all of the risk of living in a low-lying area without any of the luxury amenities associated with waterfront properties, he said.
“Buyers will call me and tell me they don’t want to be in a flood zone,” Jimenez said. “It’s not because of price. It’s because they don’t want to deal with flooding. They’ve seen the videos. They don’t want to entertain dealing with those issues.”
Pricing in flood risk
In 2022, FEMA finalized a new way to calculate insurance prices called Risk Rating 2.0. The system bases prices on an individual home’s risk level instead of a more general estimate based on flood zones.
The goal was to create a fairer system, in which property owners pay based on their actual risk of flood damage. The result was higher premiums for Long Island.
“The ones that are getting hurt are ones that have claims, or repetitive-loss properties,” said David W. Clausen, CEO at Coastal Insurance Solutions in Rocky Point. “If you’ve had a few losses, those people will be in a tough spot as opposed to the same exact home next door.”
The ones that are getting hurt are ones that have claims ... those people will be in a tough spot as opposed to the same exact home next door.
— David W. Clausen, CEO at Coastal Insurance Solutions
Under Risk Rating 2.0, the average cost of flood insurance for single-family homes on Long Island will nearly double to about $2,500 a year, according to a Newsday analysis of FEMA data. Long Islanders paid about $1,300 on average under the old system.
But homeowners won’t see that change all at once. Federal law prohibits the National Flood Insurance Program from increasing premiums more than 18% a year, so homeowners facing the steepest increases could see their costs increase by that amount annually for 5 to 10 years.
For a Long Islander paying the area’s average premium of $1,300 before Risk Rating 2.0 went into effect, it would take six years before they would pay the full-risk premium of $2,500.
Suffolk County policyholders will see larger increases on average than those in Nassau. The average Suffolk premium will increase 122% from 2022 until properties are paying the full value of their new rates.
The average flood insurance premium will double in 50 of the 163 Long Island communities that have more than five homeowners required to carry flood insurance.
Under the new pricing system, West Islip will have the highest flood insurance premiums on average, at $4,486 a year, among 674 homes in that community included in FEMA data as of December 2022. The average premium is nearly quadruple the average premium under the previous rating system.
Because of the 18% cap on annual increases, it won’t be until the 2030s that a West Islip home would pay its full risk rate, if it were hiked from around $1,200 to $4,500.
“Every home is generating its own rate,” Clausen said. “Insurance has been going up just like a lot of other things, so it’s a little bit masked.”
All 10 of the communities that will see the greatest percentage increases in premiums under Risk Rating 2.0 are in Suffolk County.
Among areas with at least 100 flood insurance policies, Brightwaters, Blue Point, Islip, Copiague and Babylon will see the greatest percentage increase in average flood insurance premiums, with the average price roughly tripling or quadrupling in those areas once properties' full risk is factored in.
Long Beach, Oceanside and Massapequa have the most federal flood policies among Long Island communities. Premiums in those areas are also among the highest on average on Long Island, but the average policy in those areas didn’t rise by as much under FEMA’s new flood policy.
The average cost will be about $2,582 in Long Beach, $2,503 in Oceanside and $3,286 in Massapequa, according to FEMA data.
Cory Knopf, an associate broker at Compass in Oceanside, estimated that about half the homes in the communities where she sells are required to have flood insurance.
In coastal neighborhoods, buyers who are already facing low inventory make their search harder by excluding homes that require flood insurance, she said. Knopf tells buyers looking in areas that require coverage to expect to pay about $1,500 to $2,000 a year for flood insurance for homes with a reasonable amount of risk based on their insurance premiums.
While FEMA's changes help, there is still a vast gap between homeowners' perception and their actual flood risk, said Jeremy Porter, head of climate implications at First Street in Brooklyn, a company that publishes research and data on climate risk.
Porter, a Babylon resident, said the knowledge gap has led homes at risk of damage from costly storms to be overvalued by buyers in states without flood risk disclosure because the risk of damage isn't properly factored into prices, according to an article he co-authored last year for the journal Nature Climate Change.
Florida and Massachusetts are among the states that lack disclosure requirements where the researchers said overvaluation was greatest. Property values are also higher in those states; West Virginia properties were among the most overvalued as a percentage of local home prices, according to the study.
A New York law requiring sellers to disclose more about their home's history and risk of flooding went into effect in March, and Porter said that could begin to affect home values in the coming years.
Research published by mortgage purchaser Fannie Mae in February found a 2019 flood disclosure law in Texas affected home prices. The change in Texas law required sellers within 500-year flood plains, or areas that would be covered in water during a flood with a 1-in-500 chance of happening in a given year, to disclose their home's risk to buyers. Previously, only sellers living within the narrower 100-year flood plain were required to disclose.
The authors found sale prices in the 500-year zones were 4.2% lower relative to properties with negligible flood risk, according to the analysis. The findings highlight how homes farther from the coast could still face threats from climate change.
The fast growth of home prices since the pandemic has masked some of that effect on Long Island. But homeowners at greater risk of flooding could see their home values appreciate at a slower pace than those with lower flood risk in the future, Porter said.
“As long as we have a strong market and housing prices are increasing, I think the impact is going to be kind of hidden,” Porter said. “You'll start to see the gap widen over time, but the people that are being hit don't really notice it because the property values are still going up.”
As long as we have a strong market and housing prices are increasing, I think the impact is going to be kind of hidden.
— Jeremy Porter, head of climate implications at First Street
Photo credit: Newsday / Steve Pfost
'Where I want to stay'
Keith Gropper, 63, and his wife, Lisa, 59, live in The Canals section of Long Beach on the north side of the barrier island. Gropper, a steamfitter who belongs to Local 638, said he remembers returning to his home the day after Sandy after flooding destroyed the main floor and boiler.
“It wasn't a violent storm. It was just massive amounts of water,” he said. “All I saw was there was a dirt line on the outside of the house where the water had come up.”
In all, the storm caused more than $200,000 in damage, forcing his family out of the house for about six months.
More recently, heavy storms have caused water to rise through sewer grates, pooling about 18 inches in the middle of the street and spilling onto neighbors’ lawns. Gropper’s home sits about 3 feet off the ground above a crawl space, but some of his neighbors’ homes are lower to the ground.
“When the street floods, I’ve got to yell at [cars] to not go fast because any waves go in their front door,” he said.
Gropper said he pays about $4,500 a year in flood insurance, which he estimated has increased by about $1,200 in the past few years. While it’s an unwanted expense, he said it doesn’t seem like much compared with the roughly $20,000 he pays in property taxes.
When he retires, Gropper said taxes and insurance on the home will take up about one-third of his income.
“My main concern is when I’m on a fixed income in the very near future that taxes and insurance — I won’t be able to stay in the house,” he said.
But with his adult children living nearby, Gropper has no plans to leave Long Beach.
“This is where my home is, and this is where I want to stay,” he said.
This is where my home is, and this is where I want to stay.
Keith Gropper, Long Beach
Photo credit: Debbie Egan-Chin
Jonathan LaMantia covers residential real estate and other business news on Long Island. He previously covered the business of health care for Crain's New York Business.
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