New FEMA Risk Rating 2.0 for Flood Insurance Premiums
Change Effective 10/1/21
FBCLID 11 residents,
A question that many residents have asked FBCLID 11, is “Even though I live behind a levee, should I still buy flood insurance?” While each resident must make that decision for themselves, LID 11 strongly recommends that every homeowner purchase flood insurance. Whether you have insurance already or are considering purchasing insurance, there is new information that you need to know.
Historically, FEMA, the Federal Emergency Management Agency, would determine the flood risk of property based on published Flood Insurance Rate Maps. The maps, or FIRMs, would show different flood factors and flood risk potential which they would use to set the rates of flood insurance. This methodology has not changed in over 50 years, but the change is coming, effective October 1, 2021. FEMA’s new method called Risk Rating 2.0 utilizes newer technology available to assess the flood risk of a property.
Using Risk Rating 2.0, FEMA estimates that 14% of Texas residents with an existing flood insurance policy will see an immediate decrease in their flood insurance premium; 79% of Texas residents with an existing flood insurance policy will see an immediate increase in their flood insurance premium that could be as much as $120 per year; 3% of Texas residents with an existing flood insurance policy will see an immediate increase in their flood insurance premium of $120 to $140 per year; and 4% of Texas residents with an existing flood insurance policy will see an immediate increase in their flood insurance premium greater than $240 per year. These FEMA estimates are for the first effective year and are averages only.
We do not yet know how Risk Rating 2.0 will impact flood insurance prices in Fort Bend County LID 11. We do not know which category of premium change will include the District or your home. However, if you already have flood insurance, FEMA says you will be grandfathered into how fast your flood insurance premium can increase. Under current law, it is federally mandated that a flood insurance premium cannot increase by more than 18% per year and FEMA indicates that they will abide by this rule.
However, we cannot guarantee any specific information about FEMA’s program or how future increases will be applied.
As Board members, we encourage you to get flood insurance now. Contact your home insurance provider. Since a flood insurance policy takes 30 days to go into effect, you must purchase your policy by September 1, 2021, for your policy to become effective prior to the effective date of Risk Rating 2.0.
Additional information regarding Risk Rating 2.0 can be found at Risk Rating 2.0: Equity in Action | FEMA.gov. We encourage you to visit the FEMA website and/or talk to your insurance agent as soon as possible.