FEMA’s Risk Rating 2.0 Framework Will Alter Flood Insurance Rates
From NAHB Now
The Federal Emergency Management Agency (FEMA) on April 1 released new details outlining the implementation schedule for Risk Rating 2.0, an initiative to transform the National Flood Insurance Program (NFIP) program to make it more consumer friendly and better reflect the actual risks properties face.
In November 2019, NAHBNow reported that FEMA deferred the implementation of this initiative. While FEMA had originally intended to implement the program effective Oct. 1, 2020, the implementation was pushed back one year to Oct. 1, 2021.
The new Risk Rating 2.0, framework changes the way FEMA rates a property’s flood risk and prices flood insurance. In particular, the calculation will examine structure-specific factors and risks beyond whether or not a structure is located within a Special Flood Hazard Area on a Flood Insurance Rate Map, such as distance to flooding source, building elevation and the cost to rebuild the home. As a result, some rates will go up and some will go down.