In flood insurance, a “full risk rate” refers to the premium charged for a flood insurance policy that reflects the actual risk of flooding for a specific property, without any subsidies or discounts according to FEMA’s Risk Rating 2.0. Policies that were in place prior to RR2.0 will see an increase of 18%–the maximum allowable increase–each year until they reach the “full risk rate.” Full risk rate is the price someone would pay if they bought a policy after RR2.0 was fully implemented in 2023.
The National Flood Insurance Program (NFIP) Reserve Fund Assessment is a charge on NFIP premiums, mandated by the Biggert-Waters Flood Insurance Reform Act of 2012 (BW12), to fund the NFIP Reserve Fund, which helps cover losses from catastrophic events. The Biggert-Waters Flood Insurance Reform Act of 2012 (BW12) authorized the Reserve Fund and the assessment mechanism to ensure the NFIP’s financial sustainability. The Reserve Fund Assessment is currently 18% of the discounted premium. It is applied to all policies.
COMMUNITY RATING SYSTEM (CRS) DISCOUNTS
Policies not at the full risk rate have lost the CRS discounts that our communities worked so hard to achieve. Full risk policies will see the CRS discount on their bill.
- Monroe County = 35%
- Key West = 25%
- Islamorada = 25%
- Layton = 25%
- Marathon = 20%
- Key Colony Beach = 15%
The State Attorneys General of 10 states including Florida have sued FEMA demanding transparency of the rating methodology.