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3 Tips for Insurance Agents to Tackle Risk Rating 2.0 Challenges

Updated: May 31, 2022

FEMA’s Risk Rating 2.0 is in full swing as of April 2022, and policyholders and insurance agents alike are taking notice.

At the current pace, Risk Rating 2.0 will likely have to sustain rate increases for many years to come. According to FEMA, policyholders could see price increases of up to 18%. They estimate 77% of the National Flood Insurance Program (NFIP) policyholders could see an increase of $0-$240 or more per year according to FEMA.

With NFIP rates in flux, policyholders are reaching out to their insurance agents to understand why their rates are going up and what other options they might have. At the same time, agents are seeing inconsistent rates coming out of the NFIP as they seek quotes for their policyholders. Some have reported frequent pricing variability from one week to the next, requiring various time-consuming workarounds.

For the foreseeable future, insurance agents will need to understand, and help their

policyholders access, all of their flood insurance options, including private market flood insurance alternatives. Agents can get ahead of the competition by understanding the current landscape and offering their clients options from both the NFIP and the private market. To do so, agents should:

1. Start the discussion well before renewal time. Talk to policyholders about their flood insurance options well in advance of a policy’s renewal date. Also, if an insured selects private flood insurance, inform any mortgagee responsible for paying the premium well in advance of the renewal date.

2. Record each quote you receive from the NFIP. Many agents are reporting the NFIP rate changes frequently for the same structure at the same coverage and limits. Recording each quote gives you better odds of convincing the NFIP to honor lower quotes should the price increase before your policyholder makes a purchase.

3. Supplement each NFIP quote with a private market quote. Private flood insurance, such as policies found at, may offer better coverage at lower premiums.

By planning ahead, educating themselves on FEMA’s Risk Rating 2.0,private flood insurance alternatives and communicating that information to policyholders, agents can rise above the competition and provide better service to the people they protect and serve.

Disclaimer: The content on this site is for general information purposes only. It is not intended to be relied on or used in place of professional advice. We do not endorse, assume responsibility for, or guarantee the accuracy of the content. All liability is expressly disclaimed.


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