Sitting in his office a stone's throw from the Merrimack River in Lawrence, insurance agent Evan Silverio marveled at the numbers on his computer screen.
He said it's long been common for homeowners here to pay several thousand dollars a year for flood insurance. The city has three rivers running through its center — the tributary Shawsheen, Spicket and Merrimack rivers — and many properties at low elevations.
But on Oct. 1, Silverio said the cost of flood premiums seemed to go haywire. One customer who previously paid $300 a year in flood coverage just got a new quote for $5,770.
"This is a real case," Silverio said. "I've done this for years, and I said, 'Wait a minute. What am I doing wrong here?' "
But it wasn't an error. It was the product of a new risk-rating system used by the federal government to determine flood insurance premiums. And under the new system, Lawrence is one of the cities facing the most dramatic increases in Massachusetts.
Risk Rating 2.0
The premium increases mark some of the biggest changes since the National Flood Insurance Program was established in 1968 — a way to help homeowners in places where insurance was either too expensive or unavailable.
Federal officials and environmental groups say the old rating system was outdated, often based on little more than a home’s location on a flood map, and sharply underestimated the risk faced in communities across the country. And that in turn often encouraged people to build — and rebuild — in areas vulnerable to floods, advocates say.
But after years of debate, the government switched to a more sophisticated system for determining premiums, called Risk Rating 2.0, in October. The new system takes into account an array of factors beyond flood hazard maps, including the number of claims made historically on a property, proximity to a body of water and municipal infrastructure designed to divert floodwaters.
That means flood insurance rates are changing for millions of U.S. homeowners, including for residents of many inland communities like Lowell and Lawrence.
Jeremy Porter, a demographer who studies the implications of flood insurance with the nonprofit First Street Foundation, called Lawrence "an example" of what is happening to people across the country as the government switches to the new rating system.
First Street Foundation, a New York nonprofit, has warned for years that the old government models understated the real risk of flooding, especially amid climate change and rising sea levels. The new updated models predict major floods could happen in Lawrence every 20 years, driving up rates.
The government says the new rating system is more equitable, setting the highest rates for the people at the most risk. One of the unintended consequences, Porter says, is low-income communities like Lawrence seeing massive premium increases.
Flood Rate Increases, By Community
The changes will go into effect gradually over the coming years, as premium increases are capped at 18% annually for existing policies. New policies, however, will see the full increase immediately.
FEMA has only released data on the first year of rate changes. That data show some Lawrence ZIP codes face some of the biggest increases in the state, with a large share of policyholders seeing hikes of more than $120 in the first year alone.
David Maurstad, of the Federal Emergency Management Agency, who oversees the National Flood Insurance Program, noted that most U.S. homeowners will actually see rate cuts or only modest increases under the new system. But he acknowledged other areas like Lawrence could see significant hikes.
"It illustrates the price of protecting property against climate change isn't free," Maurstad said.
And Maurstad said President Biden is asking Congress to help subsidize rates for low-income homeowners.
"So, there'd be a sliding scale of premium assistance based on the income of the policyholder," he said.
That could be needed in Lawrence, where most of the people are immigrants; the city has the lowest per capita income in Massachusetts. Indeed, the median income in Lawrence is more on par with the averages in Mississippi and Puerto Rico than the rest of Massachusetts.
A History Of Floods
Lawrence residents have long faced the risk of flooding after heavy rains. Just ask city native Peter Blanchette, who lives in the home his grandfather first owned in the 1930s.
"In 1938, we got flooded here, and when we were taking wallpaper off ... there was a differentiation in the color of the plaster," Blanchette said, pointing to a spot roughly 6 feet off the floor.
During the 1938 storms, he said his grandfather opened the basement windows, sent his family to stay with relatives and rode out the flood by himself.
Disaster struck again in the spring of 2006. It rained for eight days straight in eastern Mass., leaving parts of Lawrence and surrounding communities looking like New Orleans after Hurricane Katrina.
Lawrence Fire Chief Brian Moriarty lost his boat thanks to the Mother's Day flooding. He recalls a nursing home having to evacuate its residents, and the hospital had to rush to open its new emergency room to accommodate those displaced.
Still, Moriarty said he was surprised to learn Lawrence policyholders are seeing some of the biggest increases in flood premiums. Flooding isn't a major concern within the department, he said, but he's prepared for anything.
"I've grown to appreciate you can have a lot of things happen here that you don't expect — did you expect that gas system to blow up?" he said, referencing the Merrimack Valley gas explosions that claimed the life of a Lawrence resident.
"So in this job, in any community, you would never say never."
High And Dry
Still, some Lawrence homeowners facing rate increases insist the risk isn’t that high. That includes Rodelfy Seifer — who said his triple-decker was untouched by the flooding 15 years ago.
Now, facing ever-increasing flood premiums, he's trying to sell, but he said the rate increases make that a struggle.
After signing a purchase and sale agreement, Seifer said one prospective buyer received a quote of $11,000 — more than three times what Seifer pays now.
"They put an offer on the house and then when they went in to do the numbers ... the bank said, 'Hey, you cannot afford this house with this flood insurance.' ”
Flood insurance is also a concern for business owners in Lawrence. Andy Kelley of Kelley's Discount Furniture was already paying $7,000 a year in flood insurance.
Kelley's giant 19th-century warehouse sits beside the roaring flow of a dam on the Merrimack River. But Kelley insists that even in a bad storm, the flood waters wouldn't run high enough to threaten the building.
"This building never got water in it," Kelley said. "The people that owned it before me, over 60 years, there's never been water in the basement.
"My problem is that I'm in a flood zone."
Now Kelley says he might have to sell the building. The pandemic has made it harder to buy wholesale furniture, and flood insurance and other costs are destroying his profit margin.
But he’s still waiting to learn how his bill could change under the new flood insurance guidelines. And whether he can afford to remain in Lawrence.
With reporting from WBUR's Todd Wallack
This segment aired on November 9, 2021.