FEMA’s New Risk Rating 2.0 Fully In Effect Now and Impacting Flood Insurance Rates

As of April 1, 2023, the Federal Emergency Management Agency (FEMA) has put into action the National Flood Insurance Program’s (NFIP) Risk Rating 2.0, a newly devised pricing methodology. According to FEMA, this contemporary approach to flood risk assessment uses state-of-the-art technology and conforms to industry’s highest standards. The aim of this new model is to ensure that FEMA provides flood insurance rates that are not only actuarially justified, but also more equitable and comprehensible, and most importantly, they accurately represent the flood risk associated with a specific property.

There has been a fair amount of negative reports about the change in flood insurance pricing with 77% of the people with flood insurance seeing an increase in premiums as a result.  For Missouri, 29.3% of homeowners with flood insurance will see a decrease in their flood insurance premium as a result with about 40% of these decreases being $50 per month or more.  On the flip side, 62.4% will see an increase up to $10 per month, 6.1% with an increase from $11 to $20 per month and just 2.2% of the homeowners will see their flood insurance premiums increase by more than $20 per month.

Resources for more information on FEMA’s Risk Rating 2.0 as well as flood insurance:

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