FEMA raising flood insurance rates in Southwest Florida, blames bad Hurricane Ian rebuild

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Flood insurance rates are rising for Southwest Florida residents — as much as 25% — after the Federal Emergency Management Agency accused some communities of improperly rebuilding after Hurricane Ian.

On Thursday, FEMA representatives told Lee County and four municipalities within it that residents were losing their long-held flood insurance discounts because they didn’t follow the federal agency’s rules on rebuilding after a storm.

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The rollback affects more than 115,000 flood insurance policy holders in Lee County, Cape Coral, Fort Myers Beach, Estero and Bonita Springs. According to FEMA data, the average policy holder could see a $300 annual increase to their flood insurance premium starting Oct. 1.

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Each of the communities had a 25% discount on flood insurance policies, except for Estero, which had a 20% discount. Collectively, FEMA said, the discounts saved the community tens of millions of dollars a year. Those are now gone, with no chance to earn them back until at least April 2026.

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To stay in the national flood insurance program, communities must agree to a few ground rules. One is that if a storm causes damage worth at least 50% of the value of a property — known as substantial damage — it must be torn down and built up to the newest building codes.

That’s an expensive proposition that most Floridians struggling in the wake of a storm’s devastation are eager to avoid, but the rule is designed to keep properties in harm’s way safe and to ensure the federal government isn’t stuck footing the bill to rebuild them again and again.

After Hurricane Ian struck in 2022, some communities in Southwest Florida were quick to try and find ways to help residents avoid rebuilding, and thus, elevating, their properties. Cape Coral, one of the communities losing its flood insurance discount, rolled back some of its stricter rules around rebuilding to help residents avoid hitting that 50% line.

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FEMA said the problems began shortly after the storm, when federal teams visited the communities hit the hardest and looked at the properties they thought were most likely to be substantially damaged, including older homes built in flood zones, some with previous flood damage.

“What the team found, unfortunately, is there was a lot of unpermitted work, lack of documentation,” said Robert Samaan, the regional administrator for FEMA’s Region 4, including Florida. “It was just a failure to properly monitor the activity in the special flood hazard area.”

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If Lee and the other municipalities don’t proactively work with FEMA to address these issues, he said, they could be kicked out of the flood insurance program altogether. Each policyholder would have to pay a $50 surcharge, and no new flood insurance policies could be written for the area. Disaster assistance after a hurricane would also be limited.

“We’re not putting them on probation just yet,” Samaan said. “What follows is we’ll be working with these communities. If they do their remediation plan, if they work with us, if they fix the deficiencies, then they do not have to be put on NFIP probation.”

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