Full implementation of Risk Rating 2.0 begins April 1, representing the first major overhaul of flood insurance rates since the NFIP was created more than 50 years ago.  According to FEMA, 77 percent of policyholders nationwide will see premiums increase with the implementation of RR 2.0.  Some states, like Florida, Louisiana, and Texas, will see 80 percent of policies, or more, increase.

The rating methodology was implemented for new policies on October 1, 2021, and renewals after April 1, 2022 will be seeing the methodology applied to their policies.

FIRM joined Greater New Orleans Inc.’s (GNO) Coalition for Sustainable Flood Insurance and has been working with our coalition partners to ask for more transparency along with public engagement and education.

Michael Hecht, President & CEO of GNO, Inc. reported, “We are already seeing extreme and inexplicable rate increases across our region, with policies that were $700 expected to skyrocket by as much as 200-300 percent, and in many cases much more, when they reach their full-risk rates.  To penalize homeowners who have played by the rules and maintained their insurance is not good policy – it is both morally unjust, and economically unwise.”

Agents in Monroe County are seeing the same increases with some new policies for new construction built well above base flood and to current strict standards seeing what would have been Preferred Rate Policies coming in close to $5,000. Visit our live dashboard to see some of the changes in Monroe County.

FEMA can only increase residential rates by 18%.  While some homeowners may be able to cover that now, in just a few years, some homeowners may not be able to sell their properties, or worse could lose them because of the high cost of flood insurance. Even now, some homeowners are not qualifying for mortgages due to the cost of a new flood insurance policy. What were once considered Preferred Risk Properties in the X zone will now require flood insurance based on the new system which doesn’t rate according to flood zones.

In the video above Parish Presidents have joined the Coalition in asking for more transparency and support from our Members of Congress.  Senator Marco Rubio joined others in co-sponsoring the Homeowners Flood Insurance and Transparency Act to delay the implementation, reform the NFIP and protect policy holders from unsustainable rate increases.

FIRM has been warning of the dire consequences of this methodology since the program was first initiated in 2019.

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