FEMA Releases New Flood Rating System
Recently, the Federal Emergency Management Agency (FEMA) announced a long-awaited update to the rating methodology used for the National Flood Insurance Program. Previously, the rating system was based on the flood zone where a property was located and its elevation within the flood zone. The new, improved rating system, Risk Rating 2.0, utilizes advancements in technology and industry best practices that take into account the property value, cost to rebuild, risk of flooding and other factors, to more accurately price policies based on the property’s unique flood risk.
Risk Rating 2.0 will take effect within a two-phase approach:
- Phase 1
- New policies beginning October 1, 2021, will be subject to the new rating methodology. In addition, existing policyholders eligible for renewal will be able to take advantage of immediate decrease in their premiums.
- Phase 2
- All remaining policies renewing on or after April 1, 2022, will be subject to the new rating methodology.
To review complete details pertaining to FEMA’s new Risk Rating 2.0 system, please click here.