Risk Rating 2.0 was rolled out a year ago. It redid how the National Flood Insurance Program (NFIP) sets flood insurance rates. The Federal Emergency Management Agency (FEMA) administers the NFIP and — basically — promised that wealthier people with bigger homes would bear the brunt of the rate increases.
FEMA said 90% of policyholders will see rates stay stable and, in some cases, drop.
A year ago the rate changes were put into place for new policies. April saw increases going into place for current policyholders. It looks like FEMA’s promise isn’t going to be kept.
Or so says the real estate company, Redfin.
According to Redfin’s research, over 80% of current policyholders are going to see their rates rise. And instead of the rates affecting only those with bigger, more expensive homes, the increases will be spread out to all homeowners.
FEMA has no comment about the information Redfin has released. The only thing it said was, “FEMA hasn’t provided any Risk Rating 2.0 premium information to outside entities, and any attempt to compare an outside entity’s premium estimates to Risk Rating 2.0 is simply speculation.”
Redfin’s Sheharyar Bokhari is a senior consultant. Bokhari said while FEMA has not released any specific information, the information Redfin has is not speculation. The company was able to take data from zip codes that FEMA released on the number of policyholders who will see increases.
The company’s findings came from analyzing census data on income and ethnicity in those zip codes.
Close to 90% of homeowners in Florida and Texas will see big increases. However, all along the premium rates have been way below the national average in those states. What’s most odd about that statistic is that those two states have seen a disproportionate amount of what is terms “devastating” damage.
Redfin also notes that 76% of policyholders in neighborhoods with the highest earners will see increases. That’s below the national average of 81%.
The real estate firm also notes that minorities and the poor — in many cases — will see higher rate increases than average.
Source link: Digital Insurance — https://bit.ly/37ZtMlz
Flood Insurance — Rates to Rise for 81%
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