|Risk Rating 2.0 Rates Now Available- Full Implementation October 1st.|
|As of September 1st, most insurance companies and the NFIP Direct are offering Risk Rating 2.0 insurance rates. This is for new business on or after October 1st, 2021.|
However, agents can now compare your flood insurance rate from what it currently is, to what it will be in Risk Rating 2.0. Based on the premium, the following scenarios are possible:
-Existing policies renewing with effective dates between October 1, 2021 and March 31, 2022 can renew under the “legacy” rating plan or renew their policy under RR 2.0, whichever is more beneficial
-All existing policies with renewal dates on or after April 1, 2022 will be renewed under RR 2.0. If your premium is not beneficial under Risk Rating 2.0, then you will increase each year to the new rate, from your existing rate (no steep premium increases)
-All new business policies effective on or after October 1st 2021 must be issued under RR 2.0.
NOTE: All renewal notices sent to insureds between October 1st and March 31st will be based on “legacy” rates. To find out what your Risk Rating 2.0 rate will be, contact your agent.
Concerns, Comments, And Observations
The MCC has been spending a lot of time in the past two weeks working to understand trends, benefits and concerns in Risk Rating 2.0. We have found the following:
-For agents, for the most part the new process to quote a policy is easier
-FEMA determines your first floor elevation for each quote. The MCC is finding that more often than not, an elevation certificate is more accurate and helps your rate
-There are rating anomalies, such as significant premium swings in both directions, that the MCC cant explain and are awaiting FEMA clarification
-More premiums appear to be going down vs up
The MCC will continue to monitor Risk Rating 2.0 which begins full implementation on October 1st. There is no planned Congressional delay, although it has been advocated for by several members of Congress.
The MCC is also watching for a government shutdown, which could cause the NFIP to lapse. In a lapse, no NFIP policies may be issued, and no new renewal notices may be sent. We will be updated you early next week with guidance in the event of a shutdown.
As always, please reach out to us with questions.