• Home
  • About Us
    • Our History & Accomplishments
    • Our Leader
    • LMA Gives
    • Photo Gallery
    • Library & Resources
  • Services
    • Assignment of Benefits & Insurance Litigation
    • Associations & Nonprofits
    • Business Development & Procurement
    • Education
    • Energy & Environment
    • Emergency Management
    • Flood Insurance & Resilience
    • Healthcare
    • Insurance/Financial Services
    • Legislative & Regulatory Monitoring
    • Marketing Intelligence
    • Property & Casualty Insurance
    • Public Relations
  • News / Podcasts / Library
  • Contact
  • Home
  • About Us
    • Our History & Accomplishments
    • Our Leader
    • LMA Gives
    • Photo Gallery
    • Library & Resources
  • Services
    • Assignment of Benefits & Insurance Litigation
    • Associations & Nonprofits
    • Business Development & Procurement
    • Education
    • Energy & Environment
    • Emergency Management
    • Flood Insurance & Resilience
    • Healthcare
    • Insurance/Financial Services
    • Legislative & Regulatory Monitoring
    • Marketing Intelligence
    • Property & Casualty Insurance
    • Public Relations
  • News / Podcasts / Library
  • Contact
  • MENU

The Risk Rating 2.0 Flood Insurance Reality

SHARE THIS

Big increases for the most risky homes

In our last newsletter we reported that FEMA had just released more data on the National Flood Insurance Program’s (NFIP) Risk Rating 2.0: Equity in Action, its new model for better pricing risk to rate.  Since then, several news outlets across Florida have been using the zip code lookup feature in these recent exhibits to see exact pricing – and the results are significant over time.  The caveat is that increases are capped at 18% annually until the full rate is reached. 

WLRN-FM in Miami reports that for the worst-hit ZIP code in South Florida, 33469, a stretch of coastal Palm Beach County that covers parts of Jupiter and Tequesta, it will mean a 342% premium increase, on average.  In the most expensive ZIP code for flood insurance in South Florida, 33149, which covers Key Biscayne, the average premiums will rise north of $7,000 a year.

These, of course, are the outliers in the data, those living in the most vulnerable areas of the state, probably representing about 4% of Florida policies.  FEMA in premiering the program in 2021, said that 20% of the NFIP policies in Florida will see immediate premium decreases, with another 68% seeing increases of $0-$120 annually, and another 8% seeing $120-$240 annual increases, per the chart below.  Florida has by far the largest number of federal flood insurance policies: 1.6 million of the total 4.7 million.

Source: FEMA

In the most potentially flood-prone counties of all – Pinellas and Hillsborough – the Tampa Bay Times reports that on average, among coastal and inland properties, NFIP rates will increase over time by 112% and 125% respectively under Risk Rating 2.0.  FEMA, in moving from the one-size-fits-all flood maps that were sometimes decades old to this new system utilizing modern house-specific data, insists 2.0 better prices risk to rate in a program that has been running multiple billion dollar deficits for the past 15 years. 

“The new methodology allows FEMA to equitably distribute premiums across all policyholders based on the value of their home and the unique flood risk of their property,” FEMA wrote in an April 2021 press release.  “Currently, many policyholders with lower-value homes are paying more than they should and policyholders with higher-value homes are paying less than they should.”

Flood waters remained to the bottom of car doors and nearly to front door knobs of homes in Ft. Lauderdale the morning after the big rain, April 13, 2023. Courtesy, Broward S.O.

Although the rate increases will be gradual for renewal policyholders, new policyholders since April 2022 have enrolled at the full Risk Rating 2.0 rate.  With the Florida Legislature requiring Citizens Property Insurance policyholders with HO3 policies to get flood insurance – whether federal NFIP or the growing number of private writers – look for the policy count to go up.  We think that’s a good thing.  The greater public benefit is more Florida residents with flood insurance that for most, is very reasonably priced, offering protection from the increasing ravages of flooding most recently demonstrated in Broward County’s April floods and last September’s Hurricane Ian.

LMA Newsletter of 5-22-23

SHARE THIS

Tags: Citizens Property Insurance Corporation, Federal Flood Insurance, FEMA, Florida insurance rates, Ft. Lauderdale Flooding, Insurance Rates, National Flood Insurance Program, Private flood insurance, Risk Rating 2.0

“Another great Newsletter on Florida industry this week.  Your service and advocacy in Florida is very important to keeping me updated and apprised of the Florida insurance laws, trends and overall environment.  Something similar is very much needed in Louisiana, too.”

Jennifer Tedesco, Esq., Claims Director
Pharos Claims Services
Orlando, FL

“Great article on Risk Rating 2.0!”

Austin Perez, Senior Policy Representative for Federal Housing, Valuation, Insurance and Commercial Issues
National Association of Realtors
Washington, D.C.

“I have followed your weekly newsletter and podcasts and now have a full appreciation for what you bring to this industry.  You are an inspiring force, plain and simple.  I wanted you to know that you make a difference.  Thank you for all you do!”

Jeffrey Karam, CPCU
Bradenton, FL

“Lisa Miller is a true champion for the insurance industry, with her regular updates! We appreciate all you do and keeping us up to date on priority issues!”

Gillian Lloyd, Account Executive
Zywave
Milwaukee, WI

“Thank you Lisa for staying on top of, as well as advocating, for Florida residents and legislative reform. Your newsletters are very informative and enjoy reading the points of view.”  

Shawna Miller, Sr. Claims Quality Assurance & Compliance Manager
Florida Peninsula Insurance Company
Jacksonville, FL

“Just wanted to say that I thoroughly love your newsletter. It’s is always informative and insightful to the ins and outs of our industry.  You are an inspiration and an important asset in the insurance world.  Keep up the great work!” 

Cynthia Scott, President
University Insurance Group
Davie, FL

“Lisa this is another great newsletter, and we appreciate the time and energy you put into these informative updates – you are on top of these topics!”

Mike Graham, CEO
Smart Vent Products, Floodproofing.com, & Risk Reduction Plus
Juno Beach, FL

“Just a quick note to let you know how much I have appreciated your newsletter over the years and the assistance they offer for those in the field of claims. We depend on the information more than you will ever know!”

Laurie Rasberry, Chief Claims Officer
Acorn Claims
Prosper, Texas

“Your newsletter is fabulous!  I greatly appreciate the topics you expose, so that insurance professionals like myself can keep up with the latest events that affect the public we serve and ourselves.”

Cynthia Hoehn, Independent Property & Casualty Personal Lines insurance agent
Clermont, FL

GET THE LATEST UPDATES IN YOUR INBOX FOR FREE!

SUBSCRIBE NOW

READ THE LATEST LMA NEWSLETTER ONLINE NOW

READ NOW

331 N. Monroe Street
Tallahassee, FL 32301
(850) 222-1041
[email protected]

*DBE certified through affiliate Lisa Miller Consultants

© Copyright 2008 - 2023
Lisa Miller Associates
All Rights Reserved
Managed by SiteBolts