flooded kitchen with chairs floating in the water

What does FEMA’s New Risk Rating Mean for you?

Earlier this year, the Federal Emergency Management Agency (FEMA) updated the National Flood Insurance Program’s (NFIP) risk rating by implementing a new pricing methodology called Risk Rating 2.0. 

At Dayton Ritz + Osborne Insurance, we’ve broken down the specifics so you can understand exactly what’s changing and how it affects you. 

Why The Sudden Change? 

According to FEMA, they are in the process of developing a culture of preparedness for all, and implementing the Risk Rating 2.0 enables them to set fairer rates while ensuring rate increases and decreases are both equitable.  

This is a monumental change because lower-valued homes were paying more than their share of the risk, while policyholders with higher-valued homes were paying less than their share. In addition, the new rating process allows insurance premiums to be based on home value and a property’s unique flood risk. What all this means for you is benefit, because flood insurance is your first line of defense in a tragic event. Obtaining flood insurance alleviates stress and allows for an easier recovery. Fewer barriers to that peace of mind is always a good thing. 

What Will Remain The Same?

A fairer insurance premium for your flood policy is undoubtedly good news. However, the following will not be changing due to the implementation of this new rating:

  • Statutory limits on rate increases require that most rates will not increase more than 18% per year. 
  • Using Flood Insurance Rate Maps (FIRMs) for Mandatory Purchase and Floodplain Management. 
  • Discounts to policyholders in communities who are participating in the Community Rating System. 

Are you looking for more information? Read the complete changes listed on FEMA’s website. 

We’re Here To Help 

Dayton Ritz + Osborne Insurance is here to prepare you for each adventure that life throws your way. Partnering with us as your trusted advisor will ensure you receive the utmost quality care. In addition, our team is here to protect you, your family, or your business from the tragedy of flooding. 

For more information on our policies, call us at 631-324-0420 or contact us today.

Disclaimer

The above description provides a brief overview of the term and phrases used within the insurance industry. These definitions are not applicable in all states or for all insurance and financial products. This is not an insurance contract. Other terms, conditions and exclusions apply. Please read your official policy or full details about coverage. These definitions do not alter or modify the terms of any insurance contract. If there is any conflict between these definitions and the provisions of the applicable insurance policy, the terms of the policy control.