Timing is Everything
 

Phase One of Risk Rating 2.0 Rolled Out on October 1, 2021 — New policies, as well as policies eligible for renewal on that date, are subject to the new rating methodology but renewal customers will have to pay the Risk Rating 2.0 price or the price derived using the older method.
 

Phase Two of Risk Rating 2.0 Rolled Out on April 1, 2022 — Policies renewing on or after that date will be required to pay the Risk Rating 2.0 rate.

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Understanding the Inequities
 

No refunds for many policyholders who want to trade up. Even though you can offer your clients savings of hundreds or thousands of dollars by switching to a private flood insurance policy, the NFIP will not return one dime of their premium if the new private coverage has not been accepted by the lender within 30 days of the renewal date. 
 

A new artificial rate cap has been implemented. FEMA continues to encourage development in the most flood-prone areas because of the effective subsidy inherent in a premium rate cap of $12,125. This is seen as a subsidy that will benefit only the wealthiest homeowners.
 

Rates still do not align with risk. Regardless of how many losses a property has experienced over the past two decades, it will now be rated as though there was never a loss. However, that lower rate increases to its actual rate with the first claim. A buyer who is unaware that they have purchased a previously flooded home will be blindsided by the rate increase. In addition, the NFIP provides no viable way for homebuyers to learn the flood loss history of a structure.