A lot of influential groups and people, and important members of Congress, tried to stop the implementation of the Federal Emergency Management Agency’s (FEMA) reworking of the National Flood Insurance Program (NFIP).
They tried. They failed. Risk Rating 2.0 is now in effect. It’s a radical change in how things have been done for flood insurance in the U.S. FEMA says it’s a more equitable and accurate way to price flood insurance.
“Risk Rating 2.0 is not just a minor improvement, but a transformational leap forward,” FEMA said. “Risk Rating 2.0 enables FEMA to set rates that are fairer and ensures rate increases and decreases are both equitable.”
New policies have been impacted since October of last year. The April 1st date is for renewals. Attacks on the new system have mainly focused around rate hikes. Opponents say many could be priced out of the ability to insure their property.
“We must be laser focused making sure current policyholders don’t find themselves now in the awful position of having to forfeit flood insurance because of rising premiums under Risk Rating 2.0,” New Jersey Democrat, Sen. Robert Menendez said. “The price of flood insurance is already out of reach for many looking for coverage.”
Experts in the line of insurance say what it will do is force people with properties on expensive waterfronts to start paying a more realistic price for their insurance.
Premium hikes cannot go any higher than 18% a year.
FEMA says about 2.4 million homes will see moderate rate increases this year. The agency thinks 330,000 of them will see rates rise a few hundred dollars. About 25,000 will find rates climbing $1,200 on average and that’s just the beginning of increases for those properties.
Those seeing rates falling will number 627,000.
Source link: Insurance Journal
Source link: E&E News
Flood Rating 2.0 — In Effect Now
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