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John Rauox Marlene Sulkers, left, is escorted by her granddaughter Rachel Sulkers as they evacuate from Rachel’s residence in the aftermath of Hurricane Irma, in Jacksonville, Fla., on Tuesday, Sept. 12, 2017. Marlene Sulkers came from Ft. Myers to Jacksonville trying to get away from the storm.

USA - Your Flood Insurance Premium Will Probably Rise. Climate Change And Coastal Development Are To Blame

Risk Rating 2.0 is the first change to the way the National Flood Insurance Program calculates premiums since the 1970s and represents the biggest shift since the program was founded in the 1960s.

The vast majority of the more than 1.7 million households in Florida that have flood insurance policies through the National Flood Insurance Program will likely see their rates rise as Congress faces a Sept. 30 deadline to reauthorize the program that’s drowning in debt.

The NFIP owes more than $20 billion, money it’s had to borrow, for the most part, over the past 15 years amid intensifying floods and a proliferation of coastal development that’s simultaneously exposed more properties to that flooding.

Now the Federal Emergency Management Agency (FEMA), which administers the NFIP, has a plan to stabilize the program: a new rating system called Risk Rating 2.0: Equity in Action.

Risk Rating 2.0

Risk Rating 2.0 is the first change to the way the NFIP calculates premiums since the 1970s and represents the biggest shift since the program was founded in the 1960s. FEMA plans to introduce it on Oct. 1 of this year.

Under the current system, flood zones are used to calculate a property’s flood insurance premium. Under Risk Rating 2.0, premiums will be tied to “the specific features of an individual property.”

Today, policyholders see an average premium increase of about $8 a month. Under Risk Rating 2.0, 80% of policyholders in Florida will see their premiums increase, with the vast majority of those increases $20 or less per month ($240 per year or less). The remaining 20% will see their premiums decrease. For policyholders whose premiums will be going up, annual increases will be capped at 18%.

Flood Risk Rating map

“The new pricing methodology is the right thing to do. It mitigates risk, delivers equitable rates and advances the Agency’s goal to reduce suffering after flooding disasters,” wrote David Maurstad, senior executive of the NFIP, in FEMA’s announcement of Risk Rating 2.0 this April. “Equity in Action is the generational change we need to spur action now in the face of changing climate conditions, build individual and community resilience and deliver on the Biden Administration’s priority of providing equitable programs for all.”



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