Risk Rating 2.0

Risk Rating 2.0 is the name for the program revising national flood insurance rates by the National Flood Insurance Program (NFIP). Initially, the plan was to see the Federal Emergency Management Agency (FEMA), which oversees the NFIP, deliver rates for single-family homes by October 1, 2020.

NFIP decided last year to delay the release of the rates to October 1, 2021. This year’s October date will be for all new policy rates.

Why is this Important?

The current methodology for determining a property’s flood risk and insurance pricing was developed in the seventies. In the forty-plus years since development, climate and other factors have fundamentally changed the environment to analyze. Risk Rating 2.0 plans to use current modeling to evolve FEMA’s ability to forecast risk.

This progression of the technology used to forecast creates a view of the home as a unique property and not a group of comparable homes. Modernizing the process means they will use current actuarial practices to set rates. Finally, the new program is supposed to be more straightforward in explaining the process to assist agents and policyholders.

The lack of transparency in the process has created concerns for areas along the US coastline and, importantly, here in Fort Bend. Our area homes are protected by levees that are built and maintained to an extremely high technical standard.

What are the concerns?

Risk Rating 2.0 will be the most notable change in over four decades, and the guidance from FEMA has been slow. Many of the answers given have raised additional questions. One of the consequences of this could be a significant rise in flood insurance premiums, even for property protected by well-maintained, high-quality levee systems. At this point, we are not sure of the outcome of this new process for our property owners.

What is LID 19 doing for Risk Rating 2.0?

In March, FEMA provided an update which unfortunately did little to clarify the potential October impact to Fort Bend. With the deadline just six months away, your LID 19 board and their consultants have been in touch with regional politicians and the congressional representation in the area for guidance.

You reach out to your area congressional representation so they can hear your questions and understand your concern regarding this change.

Link for Congressman Troy Nehls