New Flood Insurance Rate Renewals Begin on April 1

The second phase of the transition to the Federal Emergency Management Agency’s (FEMA) Risk Rating 2.0 begins on April 1, when homeowners who currently have flood insurance will begin to see the revised rates as their policies are renewed.

Source: NAHB | Published on March 25, 2022

TWIA credit line for storm damage

FEMA is transforming the way it calculates premiums for flood insurance policies that are made available under the National Flood Insurance Program (NFIP) so that they better reflect the actual risks properties face.

Instead of relying on the Flood Insurance Rate Maps to determine a home’s risk, the new process will factor in details that are specific to each home, such as elevation, distance to flooding source and cost to rebuild. As a result, some rates will go up, and some rates will do down.

There are other aspects of the NFIP that are not changing under Risk Rating 2.0. Rate caps, certain premium discounts and the ability to transfer policy discounts to new homeowners, for example, can minimize policy costs. Congress will also have an opportunity to tailor an approach to affordability when it considers reauthorizing and reforming the NFIP, which expires at the end of September 2022.