Fema is going to attempt to reduce the complexity for insurance agents to generate quotes and provide more accurate risk rating using distance to a water source, flood frequency, flood types and property characteristics like cost to rebuild and elevation
FEMA estimates that approximately 66% of policyholders will see a $0-$10 per month increase in premium, with approximately 23% of policyholders seeing a decrease of $86 per month, on average. 7% of customers may see an increase of $10 – $20 per month more and around 4% of premiums could go up by $20 or more
When will Risk Rating 2.0 be implemented?
FEMA will roll out RR 2.0 in 2 phases
In Phase 1, new policies beginning October 1, 2021 and existing policies with effective dates of 10/1/2021-3/31/2022 may take advantage of decreases in their premium upon renewal once WYO systems are ready.
Phase 2 will apply to all remaining policies renewing on or after 4/1/2022
Will elevation certificates be required for rating?
Although the elevation certificates (EC) will no longer be required for rating purposes, information in section C, D or E can be used to determine the first floor height (FFH).
If an EC is provided, FEMA will compare the information entered from the EC to their First Floor Height tool and select the value that provides the best rate for the customer.
Will policies still be eligible for grandfathering?
Grandfathering will no longer be a rating factor under Risk Rating 2.0 due to the move away from flood zones and Base Flood Elevations.
Policies that are grandfathered today and that have a higher premium as calculated by RR 2.0 will be placed on a glide path until they reach their full premium amount.
If their premium is lower in RR 2.0, they will get the lower premium when the policy renews in RR 2.0
What factors will FEMA use for rating Flood Insurance?
First floor height using the FEMA first floor height tool
Number of Floors
Number of Prior Claims
Distance to Flooding source (FEMA will use geospatial information to determine this)
Floor of Residential Unit
Construction Type (Frame, Masonry, other)
Square Footage
Starting August 1st 2021 we can quote rates in the new Risk Rating 2.0 system
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