Unlike the modern rating methodology used by private market flood insurance companies, FEMA’s rating system for pricing policies prior to October 1, 2021, used older risk rating methods focused on 100-year flood maps coupled with building elevation. By implementing Risk Rating 2.0, the NFIP has enriched its data to include third-party sources, added new rating criteria, and leveraged technology to rate policies based on individual property risks. In short, because of Risk Rating 2.0, NFIP rates will go up for some property owners, but down for others. This change aims to price flood risk more accurately based on modern rating methodology and a better understanding of per-property loss risk.
