Leadership from the National Association of REALTORS® (NAR) met with National Flood Insurance Program (NFIP) Chief Executive David Maurstad on Friday, March 26 to discuss the release of a new federal flood insurance rate structure. NAR’s Insurance Committee Vice Chair Mabél Guzmán joined a small collection of industry stakeholders invited to attend the meeting. Risk Rating 2.0, as the initiative is known, was designed by the Federal Emergency Management Association (FEMA) to modernize NFIP’s insurance pricing methodology and more accurately tie its rates to the flood risks of individual properties.
“NAR is encouraged by NFIP’s effort to produce more equitable flood insurance rates for more than 5 million policyholders across the country,” said Guzmán, broker at Coldwell Banker in Chicago, Illinois. “Based on FEMA’s nationwide analysis, Risk Rating 2.0 will help ensure NFIP policyholders pay a rate proportionate to their property risk. The new initiative will also help FEMA identify and target mitigation grant dollars to the highest risk properties.”
Risk Rating 2.0 represents the first significant update to NFIP rating methodology in almost 50 years. The new rates will begin to take effect on Oct. 1, 2021, for new NFIP policyholders and for existing policyholders who may want to opt in to take advantage of immediate decreases in their premiums. All other existing policyholders would receive the new rates on April 1, 2022.
“We look forward to learning more about NFIP’s initiative and working with FEMA and Congress as they partner to reauthorize and reform this critical program,” Guzmán concluded.
For more information, please visit www.nar.realtor.
