NFIP Risk Rating 2.0 Updates
OVERVIEW
The National Flood Insurance Program's Risk Rating 2.0 is a massive overhaul of the outdated methodology of rating flood insurance premiums. The big takeaway: rates will no longer be based on Flood Insurance Rate Maps (FIRMS), which were created using a property's elevation within a specific zone as the primary rating variable, but rates will now include multiple risk variables. This new approach will also bring equity considerations into the NFIP rating methodology, meaning less expensive homes will pay proportionally less than more expensive homes. The regulatory arm of the NFIP has not changed, so all local government minimum standards for regulating within flood zones remain in place.
NFIP Flood Insurance Manual (RR 2.0 update)
Congressional Research Service RR 2.0 Report (Updated December 2021)
Additionally, 17 legislative proposals were sent to Congress that would reform the NFIP. You can read the proposal letter here.
FEMA released a fact sheet in March 2023 outlining how providing an elevation certificate can potentially help reduce a policyholder’s flood insurance premium.