FEMA recently updated the National Flood Insurance Program (NFIP) through the implementation of a new pricing methodology called Risk Rating 2.0. This methodology leverages industry best practices and cutting-edge technology to enable FEMA to deliver rates that are actuarially sound, equitable, is easier to understand and better reflect a property’s flood risk. The intention is to communicate flood risk more clearly, so policyholders can make informed decisions on the purchase of adequate insurance and on mitigation actions to protect against the perils of flooding. Current National Flood Insurance Program policyholders can contact their insurance company or insurance agent to learn more about what Risk Rating 2.0-Equity in Action means to them.

What is Risk Rating 2.0?

It’s a new pricing methodology that incorporates more flood risk data variables to more accurately reflect a property’s individual flood risk, including the frequency and types of flooding, such as river overflow, storm surge, coastal erosion, and heavy rainfall — and the distance to a water source along with property characteristics, such as elevation and the cost to rebuild. Including a property’s replacement cost value in the new methodology was a major component in the delivery of equitable rates. For more details go to FEMA’s page on Risk Rating 2.0.

What is the Timeline for rolling this out?

FEMA is conscious of the far-reaching economic impacts COVID-19 has had on the nation and existing policyholders and is taking a phased approach to rolling out the new rates.

• In Phase I: New policies beginning Oct. 1, 2021 will be subject to the new rating methodology. Also beginning Oct. 1, existing policyholders eligible for renewal will be able to take advantage of immediate decreases in their premiums.
• In Phase II: All remaining policies renewing on or after April 1, 2022 will be subject to the new rating methodology.

Who is Affected?

Existing policyholders and new policies. If you have questions regarding your flood insurance policy please call your Insurance Agent for clarification.

How does this affect existing policyholders in Walnut Creek?

Based on FEMA’s analysis, approximately 411 current policyholders are affected in Walnut Creek. Over 50% of the policyholders will see between no increase, to about $10 increase to their insurance cost, while about 25% will see a decrease. 18% of policyholders will see more than $10 increase in their insurance cost. Please talk to your insurance agent to find out how this affects your flood insurance policy rate.

For more information here are some links:

FEMA  Risk Rating 2.0: Equity in Action 

For specific profiles by state, county and zip codes, go to Risk Rating Profiles 

For state-level interactive map at no.floods.org/rr2changes breaks down projected premium changes for each state and territory. The interactive map also includes corresponding pie charts and data tables that provide policy and percentage change breakdowns.  

For those who wish to take a deeper dive, there is also an interactive map by zip code for existing single-family home policies at no.floods.org/rr2sfh and for all existing NFIP policies at no.floods.org/rr2all.