How FEMA’s Community Rating System works

The more flood-safe policies and practices a municipality puts in place, the deeper the discounts for residents under FEMA’s Community Rating System. Discounts can range from 5% to 45%.

Municipalities earn points for actions such as buying out floodprone homes, protecting open space in the floodplain from development or requiring the first floors of new buildings in flood zones to be raised above minimum levels.

Philadelphia got credit for activities including its hazard mitigation plan, its community outreach and maintaining parkland around waterways, Sullivan said. Philadelphia will enter FEMA’s program at a Class 7, which corresponds to the 15% discount for policyholders in the city.

What the discounts will mean for Philadelphians

Philadelphia homeowners, renters and businesses with policies starting or renewing after April 1 should see the discount applied automatically, according to the city. If the discount does not automatically appear, Sullivan recommends contacting your insurance agent.

The discount should equate to roughly $130 off of the median annual premium of $870 for single-family homes, including rowhouses, as of 2024.

Eastwick resident Anita Barnes said she plans to sign up for a new flood insurance policy with more comprehensive coverage after April, to take advantage of the discount. Her current policy costs close to $2,000 per year, and does not cover the contents of her home, merely the building itself, she said. Barnes called the 15% reduction “significant,” but added that it likely won’t be enough to help some neighbors on fixed incomes afford flood insurance.

“They’re retired, some are on disability, and it’s really cost-prohibitive,” Barnes said.

“I’m glad to see some progress,” she added. “At least this is something that’s going to directly affect the homeowners. Rather than just some kind of study or … planning stage, this is actually something that’s months away from happening.”

Sullivan said the city is looking for ways to secure deeper discounts in the future. He said the city could earn more points for higher elevation standards for new construction or more community outreach promoting flood insurance. Fifteen departments worked together on the city’s application, and Sullivan declined to commit to specific actions, saying they’ll require “interagency collaboration and coordination.”

“We really see this as a starting point,” Sullivan said. “We really hope over the next years of our participation in the program that we’re able to improve our standing, while recognizing that for a really large city, it can be really challenging because of the amount of documentation and activities required.”

The city plans to hire a new staff member to manage the city’s continued participation in the program, Sullivan said.