Flood Insurance Rating

Spring showers bring April flowers, or increasing flood rate costs. FEMA has announced that the national flood insurance program will be under review. Typically, flood insurance rates are based on the elevation of your home. Unfortunately, these rates do not take into account all flooding variables. With the rollout of Risk Rating 2.0, FEMA will be able to take a fair approach to increases and decreases in flood insurance. Of course, this brings changing rates to cities and communities all over Florida. Cities like Fort Lauderdale, Pensacola, Miami, Fort Myers, Naples and Tampa will get the brunt of this new change. This is because these cities historically flood during hurricanes and tropical storms.

Increasing Costs?

FEMA recognizes that Covid19 has hit the country hard financially speaking. This is why FEMA wants to change over to the new evaluation system in phases. This is good news for Fort Lauderdale, Naples, Miami, Pensacola and Tampa residents. To learn more about these phases click here.

• PHASE ONE- “Polices beginning October 1, 2021 will be subject to the new rating methodology.” However, if you’re an existing policy holder who is about to renew, you’ll be able to take advantage of immediate decreases in your policy price on October 1, 2021. This decrease will be dependent on the new rating system for your home.
• PHASE TWO- April 1st 2022 will bring in current policy holders, who are not renewing October 1 2021, into the new rating system and thus the new policy price.

FEMA has done extensive research on the flooding variables for high-risk cites. Because of this, FEMA wants to include all flooding variables into your insurance cost. You might be asking what these new variables are, let’s take a look at the list of new variables that will be included in your policy.

• Flooding Frequency- This flood frequency will affect Florida the most in the new rating system.
• Multiple Flood Types- Including river-overflow, storm surge, coastal erosion and heavy rainfall
• Distance to water – Like flood frequency, this will affect major Florida cities who are close to the ocean.

Who is affected?

Because the previous rating system wasn’t fair to all home-owners, Risk Rating 2.0 looks to change things for the better. The main change that Risk Rating 2.0 will bring is the cost of rebuilding your home. Currently, lower cost homes are still paying a hefty premium to insure against flood damage even though their home might not have the price tag of the luxury homes on the water. These home might be in for a decrease in their rates while luxury homes might see an increase in policy rates. Risk Rating 2.0 looks to close the disparity between the value of homes.

Protecting your home is one of the most important aspects of insurance. With an insurance market that is constantly changing with new laws and policies, it makes navigating home insurance nerve racking. Fortunately, insurance agents can guide you through the new laws and policies so you can better understand exactly what you’re paying for. A well informed insurance agent can guide you through the ins and outs of saving money and explaining your new policy. Get your free quote and start saving with American Insurance.