August 31, 2021
New Flood Insurance System Marin County
A new NFIP Flood Insurance rating system goes live in Marin County and the rest of the USA starting in October 2021. The new system is called NFIP 2.0 – Equity in Action.
Federal Flood Insurance:
Most flood insurance written in the United States is written through FEMA through the National Flood Insurance Plan. The National Flood Insurance Plan is usually abbreviated as the NFIP. The NFIP is within the US Department of Homeland Security. NFIP flood insurance should not be confused with Private Flood Insurance.
NFIP Flood Insurance is considered almost the standard of flood insurnace in America. Most name brand named insurers use the NFIP flood insurance policy.
New NFIP Flood Insurance 2.0:
Starting in October of 2021, the NFIP is moving to a new rating system. This new system, sometimes written or called Risk Rating 2.0: Equity in Action are charged with ” deliver[ing] rates that are actuarily sound, equitable, easier to understand and better reflect a property’s flood risk.” Acording to FEMA.
The proposed start dates of these new policies are Oct 1nd, 2021 for new policies and April 1st, 2022 for renewals. The interm period appears to allow for certain renewals to have the potential choice to choose from the two different programs.
Policy renewals are expected transition to the risk rating 2.0 flood insurance.
What Has Changed Risk Rating 2.0?
Lots, significant changes are coming. At the time of this writing [August 2021] it is not yet entirely clear what all the policies changes are/will be. However there are some clear differences.
-The use of Elevation Certificates will mostly no longer be used.
-Flood Zones will mostly also go away.
-Grandfathering will not longer be used.
-The calculation of the number of floors has become, in this author’s opinion more clear. IE simple for a consumer to understand.
-Additional and new information sources will be used to source flood risk rating factors.
-Some rates are likely to go up and others down.
There are other changes, however these seem to be the most salient ones from the perspective of a Marin County Insurance Agency. [Its also possible that some sigificant chagnes were missed at the time of this writing.]
Will my Rates Go up with the NFIP 2.0?
It is unclear at the time of this article if premiums will go up more because of the new rating system. However given the upward trend in flood insurance, it is expected that flood insurance premiums will continue to go up regardless of the new national flood insurance rating system.
When Does NFIP Risk Rating 2.0 Start in Marin County California?
Risk Rating 2.0 starts both October 1st 2021 and April 1st 2022. The time frame is no different for San Francisco Bay Area counties vs other counties in the United States.
Is this all there is to Risk Rating 2.0 and will it be the Last Change?
It is doubtfull that all of the change information is known or has been fully disclosed. In addition, it is assumed that some clean up of the change will be performed. Lastly is not at all likley that this will be the last change to the NFIP flood insurance program.
Lower Rating for Flood Insurance NFIP Risk Rating 2.0 Vs Private Flood Insurance:
It is not known if or how much the pricing differences will change at this time. Only time will tell. With the removal of requirement for elevation certificates its possible that some will find the NFIP flood insurance policy a better deal while others might find a Lloyds non admitted private flood insurance policy is a better deal. One thing to keep in mind is that there are lots of choices for Flood Insurance in Marin County at this time.
