The Federal Emergency Management Agency (FEMA) is changing its National Flood Insurance Program (NFIP) pricing methodology beginning Oct. 1.

The new pricing scheme, which FEMA calls a ‘transformational leap forward,’ will incorporate more flood insurance variables, tying premiums directly to actual flood risk.

Since the 1970s, pricing for the NFIP premiums has been based largely on a property’s elevation within a zone on a flood insurance rate map.

According to FEMA, this meant owners of higher value homes were ‘paying less than their share of the risk.’